LONDON, April 3 (Reuters) – Stocks of nickel held in London Metal Exchange (LME) warehouses MNI-STOCKS fell by 46,344 tonnes, or 12.6 percent, over the first quarter.
The downtrend has been running for seven consecutive months but there has been a marked acceleration since the start of January.
Cancellation activity, metal being taken off warrant in anticipation of physical load-out, has also been elevated. There were 54,294 tonnes of net new cancellations last month, most of them at the Malaysian port of Johor.
The ratio of cancelled to total LME tonnage has risen above 40 percent for the first time in two years. Nickel stocks registered with the Shanghai Futures Exchange (ShFE), meanwhile, stand at 47,426 tonnes, a long way off their 2016 peaks above 100,000 tonnes.
Falling exchange stocks appear to reinforce a narrative of a market that has transitioned to supply deficit. But, to quote analysts at Macquarie Bank, “visible inventories are being drawn down quicker than we had expected and there is a question mark around how available these inventories are.”