Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Alcoa Says LME Proposed Warehouse Rules Will Damage Industry

Alcoa Inc., the largest U.S. aluminum producer, said proposed changes in rules governing warehouses will damage producers without helping consumers complaining about difficulty obtaining metal.

The proposed changes “constitute a major market intervention that will aggravate the lack of transparency,” that has damaged producers and consumers, Alcoa said in a letter to the exchange dated yesterday.

On July 1, the London Metal Exchange proposed a rule to remedy warehouse withdrawal delays which beer makers have blamed for $3 billion in added costs. The rule, which requires some warehouses to deliver out more metal than they take in, will take effect on April 1 if it is approved, the exchange said. A public comment period ends Sept. 30.

Changes “will do nothing to help our customers manage their exposure to aluminum pricing,” Alcoa Chief Executive Officer Klaus Kleinfeld said in an e-mailed statement today. Alcoa has asked that the LME adopt a system similar to the Commodity Futures Trading Commission and create a contract to hedge premiums.

Aluminum producers and consumers have both opposed the rule, which would require warehouses to allow withdrawals from stockpiles equal to deposits in warehouses where waiting times exceed 100 days. United Co. Rusal, the world’s largest aluminum producer, and Norsk Hydro ASA, Europe’s third-largest producer, have called for the LME to reveal more about who holds metal contracts.

LME Warehouses

The LME has more than 700 warehouses worldwide, the exchange’s website shows. Hong Kong Exchanges & clearing Ltd. bought the LME for $2.2 billion last year.

Under the proposal, all metals loaded into warehouses would be measured over three months. For waits of more than 100 days, daily deliveries out of warehouses that are now mandated at 3,000 metric tons would have to exceed inbound shipments by at least 1,500 tons. Sites with queues below 100 calendar days would be unaffected, Matthew Chamberlain, the LME’s head of strategy and implementation, said at a press conference in July.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.