MI aluminium stocks analysis: Downtrend emerges

LME stocks of primary aluminium fell by 6,725t last week. It was the second consecutive weekly fall and marked an acceleration of the previous week's net 1,650t decline. Draw rates last week picked up momentum in reaction to the recent build in cancelled tonnage in the system. The lion's share of the activity took place in Asia, where the two South Korean locations lost 6,775t and Singapore 7,175t. This mirrors the geographical split of the recent cancellations and suggests we may be embarking on a redistribution phase in terms of LME stocks—falls in Asia and rises in the US. US locations are featuring regular "out" side activity but the bias remains towards arrivals and gently rising exchange stocks in the country. Fresh cancellations slowed to 11,425t last week from the previous week's bumper 24,850t but the system remains pump-primed for more robust daily draws in the period ahead.