MI aluminium stocks analysis: Edging lower but for how long?

The LME headline figure crept a little bit lower for the third consecutive day Tuesday with draws just outpacing fresh arrivals.

For the second day running, "out" side movement was boosted by activity at Gwangyang. However, cancelled tonnage at this South Korean location has been whittled away to just 625t from a recent mid-February peak of 16,000t.

It has been a driver of the draw rate since the start of February and total registered tonnage here has fallen by 19,975t to 31,325t, very much against the grain of what has happened elsewhere in the complex.

Rotterdam is still seeing robust daily draws and still has 9,350t in the cancelled tonnage category. After the Dutch port the next largest concentration of cancelled tonnage is at Singapore (4,575t) and then New Orleans with 3,575t.

That should ensure some continued "out" side movement going forward but the figures are not high by aluminium’s standards and the ratio of cancelled tonnage has slipped back to a very low-looking 3.3%. That suggests slowing draw rates, which will struggle to offset metal inflow at current rates.