The London Metal Exchange, the world’s biggest metals bourse, will appeal next month a court ruling that curbed its plan to cut waiting times at its warehouses.
“We welcome the opportunity to challenge the decision of the judge,” LME spokeswoman Miriam Heywood said by phone today. The U.K. Court of Appeal hearing is scheduled for July 29 and 30.
The LME’s original plan was to cut warehouse waiting times by obliging depots to deliver more metal out than they take in.
Moscow-based United Co. Rusal won a legal challenge to the new regulations on March 28 after Judge Stephen Phillips said the consultation process leading to the warehousing rule was “unfair and unlawful.” The U.K. Court of Appeal gave the LME permission to appeal last month after the exchange’s request was initially denied by the U.K. High Court April 16.
Rusal “regrets that the LME has decided to pursue further legal proceedings, rather than to acknowledge and correct the specific deficiencies identified in the judgment,” the company said in an e-mailed statement today. “Rusal looks forward to addressing its concerns to the Court of Appeal, which it is confident will agree with its position and will uphold the decision of Mr. Justice Phillips.”
Premiums paid to secure aluminum supplies rose after the rule was scrapped as lengthy waits persisted.
The waiting time to remove aluminum from the LME depots owned by Pacorini Metals, Glencore Plc’s warehousing unit, in the Dutch city of Vlissingen was 748 days in April, or about 107 weeks, the bourse said last month. Drawing the metal from Detroit warehouses operated by Goldman Sachs Group Inc.’s Metro International Trade Services LLC subsidiary would take 683 days, or 98 weeks, according to the LME.
Buyers in Japan, Asia’s largest importer, agreed to pay a record premium for this quarter at $400 a metric ton. Spot premiums in Europe gained 47 percent this year to $412.50 a ton, including the European Union import duty, Metal Bulletin data show. Premiums are poised to exceed $500 a ton as soon as the third quarter, Rusal said yesterday.