LME must boost price transparency: Kleinfeld

Jul 25, 2013 | 01:32 PM | Andrea Hotter

Tags  Klaus Kleinfeld, Alcoa, LME, aluminum premiums, price transparency, Andrea Hotter

NEW YORK — Aluminum market transparency has been a hot topic in producer circles over the past year, as concerns over confidence in the London Metal Exchange’s price-discovery processes were raised, Alcoa Inc. chief executive officer Klaus Kleinfeld told AMM.

The LME needs to improve transparency to reflect the changing nature of investors in the market, Kleinfeld said.

"We looked at what other exchanges do, and the standard today is the U.S. (Commodity Futures Trading Commission)’s Commitment of Traders reports, which break down between financial and non-financial investor. We have to adapt these standards sooner rather than later to ensure every industry player continues to have comfort in how the price is found," Kleinfeld said.

The LME should provide the same quality of information and level of transparency that is required by other commodities exchanges, such as those falling under the scope of the CFTC, to clarify the impact of financial investors on metals prices, Pittsburgh-based Alcoa said in a letter dated July 23 and submitted to the Senate subcommittee of the U.S. Banking, Housing and Urban Affairs committee on July 25 (amm.com, July 25).....

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