LME-registered stocks of aluminium fell by a net 8,500t last week, breaking a 7-week up trend. We view this as a direct function of the dissipating tightness across the nearby market structure.
With the backwardation lessening day by day, inflow slowed appreciably over the course of the week and totalled just 8,775t, compared with 31,550t the previous week.
Draws started the week in robust form but also decelerated fast as the week developed. Here, the driver was slow rates of fresh cancellation and the resulting slide in cancelled tonnage.
There were 5,225t of fresh cancellations last week—and many of them came on Friday itself—which was down on the previous week's 13,950t and the 16,600t cancelled in the week prior to that.
In outright tonnage terms, cancelled warrants fell from 34,250t to 22,200t, while the ratio of cancelled tonnage spent the second part of the week below the 3% level. Both suggest continued slow "out" side movement in the days ahead.
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