Alcoa's Position OnLME WAREHOUSINGAs the leading U.S. aluminum producer, and an aluminum consumer, Alcoa has serious concerns with the London Metal Exchange’s (LME) proposal to alter warehouse rules. Alcoa believes the proposed changes constitute a major market intervention and that the LME should suspend any imminent plans to implement its proposal. In addition, Alcoa proposes that LME owner Hong Kong Exchanges and Clearing, immediately mandate practices to improve transparency to enhance market efficiency and confidence in the LME as the price-setter for aluminum.

WAREHOUSING AGREEMENT

  • Proposed changes to the Warehouse Agreement gives LME broader powers to intervene in physical markets
  • Creates an exchange that caters to financial participants and increases price volatility
  • Additional measures needed to improve market participants’ understanding of the price discovery process
  • Regional premium contracts need revised to provide physical market participants the ability to manage premium risk
  • READ ALCOA'S SUBMISSION

LME WAREHOUSING

TRANSPARENCY