LME warehouse location overhaul key: Rusal

Aug 06, 2013 | 11:12 AM | Andrea Hotter

Tags  London Metal Exchange, LME, aluminum, United Co. Rusal, Oleg Deripaska, LME warehouses, Hong Kong Exchanges & Clearing, Andrea Hotter

MOSCOW — The London Metal Exchange should focus on building a warehouse network that reflects key consumption locations rather than adjusting the network’s rules, United Co. Rusal chief executive officer Oleg Deripaska said in an interview in Moscow.

The LME’s network of approved warehouses reflects past areas of net consumption, rendering it a poor reflection of customer needs, he said.

"The old LME was about Europe and the United States. The new LME should be about Asia, Southeast Asia and new growth locations. It’s actually a waste of time (putting metal in a warehouse) if you need to put another load on a ship to get material from a warehouse to a customer," Deripaska said. "It’s not about the old warehouses—there should be incentives to actually adjust warehouse positions to where consumption is. We have consumption in one place, mostly in Asia, and we have warehousing in....

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