Warehousing hurts aluminum: Novelis exec
Jan 23, 2013 | 01:07 PM
| Andrea Hotter
Tags
Novelis,
aluminum,
cans,
recycling,
premiums,
LME warehouses,
Tom Walpole,
Andrea Hotter
CORONADO, Calif. — Warehouse queues have caused aluminum premiums to rise and pose a threat to the industry’s long-term future, Novelis Inc. vice president and Novelis North America president Tom Walpole said in a wide-ranging interview.
Financing deals that lock up warehouse metal have led to record-high aluminum premiums, Walpole said, and while Novelis has been able to pass the cost of those premiums on to its customers, the situation likely will damage the industry in the longer term.
"It is a financial play, having that much metal trapped in warehouses and not being able to use it," he said. "We’ve been able to secure materials without having to go through the London Metal Exchange warehouse system, but when you think about the overall efficiency of the market, you’re just trapping a lot of metal that could be used for manufacturing." ....
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