29 JULY 2013www.bloomberg.com
U.S. Aluminum Premium seen falling as lawmakers review storage
Edited by : AL CIRCLE
2 min read
The premium aluminum buyers are expected to pay for supplies in the U.S. fell for a second week as lawmakers stepped up scrutiny of bank involvement in warehousing, according to Harbor Intelligence.
The premium slipped to 11.5 cents to 12 cents a pound this week, from 11.8 cents to 12 cents a pound last week, Jorge Vazquez, managing director of the Austin, Texas-based researcher, said in a report. The fee, which is added to the price of metal for immediate delivery, reached a record 12 cents to 13 cents in June.
A Senate panel held a hearing this week to examine banks’ ownership of warehouses and other commodity assets after consumers complained of long waits and rising costs. The inquiry came three weeks after the London Metal Exchange proposed measures to help unclog growing queues at the repositories.
Warehouse companies offer incentives to draw metal into their sites, competing with consumers for supplies. Incentives started to fall after the LME on July 1 proposed requiring warehouses with wait times of more than 100 calendar days to be shipping out more metal than they take in. The storage incentive fell to 2.3 cents a pound in Detroit, from 8.6 cents last week and 10.5 cents three weeks ago, Harbor said.
The premium slipped to 11.5 cents to 12 cents a pound this week, from 11.8 cents to 12 cents a pound last week, Jorge Vazquez, managing director of the Austin, Texas-based researcher, said in a report. The fee, which is added to the price of metal for immediate delivery, reached a record 12 cents to 13 cents in June.
A Senate panel held a hearing this week to examine banks’ ownership of warehouses and other commodity assets after consumers complained of long waits and rising costs. The inquiry came three weeks after the London Metal Exchange proposed measures to help unclog growing queues at the repositories.
Warehouse companies offer incentives to draw metal into their sites, competing with consumers for supplies. Incentives started to fall after the LME on July 1 proposed requiring warehouses with wait times of more than 100 calendar days to be shipping out more metal than they take in. The storage incentive fell to 2.3 cents a pound in Detroit, from 8.6 cents last week and 10.5 cents three weeks ago, Harbor said.
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