LME may delist Detroit as steel delivery site

Oct 25, 2012 | 05:28 PM | Andrea Hotter

Tags  steel, billet, warehousing, Detroit, MF Global, Stemcor, LME

NEW YORK — The steel committee of the London Metal Exchange is considering delisting Detroit as a delivery location for the exchange’s billet futures contract in a bid to boost the ailing product, according to sources familiar with the issue.

The exchange would then focus on marketing the contract to users in the Black Sea and Europe, and would consider listing new locations there including Bulgaria and Slovenia, the sources said.

LME-approved locations in Asia would remain in place, given the dominance of Chinese steelmakers in the market.

The aim of the proposal is to help the contract regain its correlation with the underlying physical market, which has fallen out of step and left the futures price at a current discount of between $150 and $200 to the cash price. ....

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