Rises at all three exchanges

Stocks held by all three major global exchanges rose yesterday. The weekly figures from the Shanghai Futures Exchange showed registered tonnage jumping sharply by 20,720t from the extremely low levels seen before the national holiday to 37,074t.

That’s probably a function of consumers having re-stocked prior to the holidays and producers maintaining production through them.

The LME headline figure saw its recent downtrend broken by one of those sporadic heavy-volume inflows that have characterised recent activity at Asian locations.

Draws were robust for a second day and as with Wednesday that reflected heavy “out” movement at Gwangyang in South Korea.
However, even with some fresh cancellations, cancelled tonnage at this location has slid to a modest-looking 3,275t.

And across the system as a whole cancelled tonnage has fallen further. It is now at its lowest level since February and the ratio of cancelled tonnage at 5.6% is also at 9-month lows.

Thursday brought another batch of “reverse cancellations” at Singapore, which we suspect is someone taking a defensive view of the incipient tightness in the nearby market structure.

Whatever the motivation, fast-falling cancelled tonnage levels in the system suggest a sharp slowdown in “out” side activity in the next couple of days.

NYMEX-warranted stocks fell sharply on Tuesday and Wednesday thanks to draws from Owensboro. The same location received 1,776 tons Thursday, helping the headline figure recover a little to 18,252 tons.