The London Metal Exchange will just take longer in its efforts to cut metal warehouse lines, said Josh Sullivan, an analyst at Sterne, Agee & Leach in New York, who issued a “buy” rating on Alcoa Inc. (AA) shares two weeks ago. Sullivan commented by phone today.
“Clearly the LME made an effort to change the rules with the U.S. regulatory interests in mind and the international players pushed back. The process is obviously for something to change and that’s something that’s being worked out among the players, and it’s going to take longer to get there.”
Alcoa shares rallied 5.9 percent in New York trading. The LME postponed the implementation of a new warehousing rule after a U.K. judge said its decision was “unfair and unlawful” in a lawsuit brought by United Co. Rusal. Premiums added to the price of aluminum on the LME were falling before the ruling.
“Alcoa is definitely up on this ruling,” Sullivan said. “It was down 7 percent in November when the initial LME rule changes were announced.”
To contact the reporter on this story: Claudia Carpenter in London at email@example.com