Almost 45,000 tonnes of material were freshly canceled on Friday May 17, predominantly out of registered warehouses in Johor and Singapore. More than 30,000 tonnes were canceled across the same locations on May 16.
"[This week’s] cancellations simply reflect the widening of the spreads. People are moving metal off exchange for lower rent and better financing deals. If you can get $8-10 per tonne per day rent, then with the current spreads it is worth locking metal [in for the] long term," one market observer told Fastmarkets MB.
The cash/June spread was most recently at $12 per tonne contango; nearby spreads had been in a slight backwardation until May 3.
This backwardation triggered mass warrantings earlier this month - of more than 200,000...