LME-registered stocks of aluminium fell by a net 8,375t last week, extending the weekly downtrend to three consecutive weeks. Before rises on Thursday and Friday the headline figure had been at a fresh 11-month low of 661,550t.
Singapore has been fuelling the "out" side activity as the big (24,750t) tranche of cancellations on Monday Dec 4 translated into actual draws. The activity tailed off on Friday itself but Singapore still managed to record a net decline of 11,075t and enters this week with a hefty 8,675t still in the cancelled category.
The reason for the acceleration in arrivals over the second half of the week was the reappearance of inflow in the US after many months. Baltimore received 6,600t on Thursday and Detroit 1,025t on Friday, which ties in with falling physical premiums and talk that consumers are now well covered through January and producers are looking to lighten their stocks ahead of the end-year period.
Note that NYMEX-warranted stocks also rose by 1,188 tons last week, although the headline figure is only slowly picking itself up from very low levels, closing Friday at 17,921 tons.
The LME system is going to become more sensitive to arrival rates in the coming days. Fresh cancellations last week were a modest 5,550t, leaving the ratio of cancelled tonnage at an equally modest 4.1%. That suggests that when the current draw activity at Singapore has run its course, we're in for a period of slower "out" side activity.
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