MI alloy stocks analysis: Downtrend remains strong

LME-registered stocks of alloy fell by another 1,880t last week, extending the long-running downtrend. The headline figure is now down by 30,860t from the start of the year and at its lowest level since August 2006. Inflow remains completely absent—the last arrivals were back in July—while draw rates have accelerated and show signs of accelerating further. Last week saw fresh cancellations of 3,560t, which was the highest weekly total since March. Cancelled tonnage spent much of the week over the 4,000t level for the first time since May. All of which suggests an acceleration of the downtrend in the coming days, unless we see a resumption of arrivals in the system.