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LME Establishes Aluminum Load Out Rule – New Buying Strategies Needed?
Edited by : AL CIRCLE
1 min read
Late last week the London Metal Exchange announced a rule change impacting any warehouse holding over 900,000 tons of inventory. The new rule would require those warehouses, beginning in April of next year, to load out a minimum of 3000 tons per day rather than the current 1500 tons per day. The rules primarily impact the Detroit Metro warehouse, owned by Goldman Sachs, said to hold about 25% of the world’s aluminum supply. Early indications suggest some large metal buying organizations do not believe the rules go far enough to address what they see as a market distortion perpetuated by warehouse owners (e.g. Goldman Sachs in the case of Metro, the warehouse with 7-10 month delays, but also JPMorgan, Trafigura and Glencore).
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