Wednesday brought another surge higher in the headline figure, which has now risen by 31,875t over the last five reporting days.
Our suspicion is that we are seeing the stocks fall-out of the big positions that came to maturity on this week’s prompt date, because the rise in the headline figure has masked accelerated cancellation activity at Singapore. Not only is this location still driving the daily draw rate but it has seen another 16,925t cancelled this week.
The interesting theoretical question is how different the LME stocks figure would look were it not for the counter-balancing effect of accelerated arrivals, particularly in the US. Baltimore received another hefty round of warranting yesterday, bringing the cumulative inflow at this east coast location to 15,175t since last Thursday.
Singapore now holds 22,100t of cancelled warrants and seems set to see continued robust draw activity in the days ahead. Cancellations outside of that one location have been minimal in recent days and draws elsewhere are decelerating as would be expected at this time of year.
The overall ratio of cancelled tonnage has risen to 5.5% from under 4% late last week, but again it disguises the concentration of cancelled warrants on just one location.
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