LME-registered stocks of aluminium fell by a net 3,350t last week, building on the previous week's decline of 5,875t and leaving the headline figure at its lowest level since the middle of January.
The fact that it is still showing a year-to-date increase of 31,000t is testimony to the speed with which LME inventories rose in the opening days of the year.
Draw rates were boosted by Singapore, where 24,750t were cancelled on Monday—a nice little surprise to those short of the nearby dates. That material started moving in the second half of the week, resulting in a strong net draw here of 7,550t.
Indeed, the headline figure would have fallen much more steeply last week were it not for a re-acceleration of fresh warranting activity—12,875t compared with just 725t the previous week.
As usual the bulk of the arrivals came in the Asian region but Gothenburg in Sweden also received 3,050t. That's the first major "in" side activity anywhere in Europe for a couple of months and may be a sign of metal being diverted to the region in response to the recent spike in physical premiums for duty-paid metal.
Monday's cancellation activity at Singapore boosted the weekly cancellation rate to 34,175t but the impact on the ratio of cancelled tonnage in the system was less pronounced with a lift from a low 3.8% the previous Friday to a neutral 6.4% last Friday.
That said, Singapore ended the week with 22,600t still in the cancelled category and while draws here boost overall "out" side activity, we'd expect the headline figure to remain under pressure.
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