MI aluminium stocks analysis: Redistribution under way

The LME aluminium stocks headline figure continues to mark time with a minimal net decline of 1,025t over the month-to-date. But each passing day brings further evidence that a major redistribution of LME stocks is taking place. All of yesterday's inflow took place in the US and although the likes of Baltimore are also seeing regular draws, the bias is very much towards stocks build at US locations. Meanwhile, the bulk of the outflow is taking place at Asian locations and they are accounting for an even higher percentage of fresh cancellations, suggesting that stocks in the region are going to come under sustained pressure over the coming period. This seems to be a "correct" reflection of the differing dynamics between a still-strong Asian market—and one where there is growing consumer awareness that Chinese exports are looking a little fragile—and a US market where demand is suffering from the double hits of the housing market implosion and lower automotive production.