Analysts, market react to LME’s warehouse policy
Nov 07, 2013 | 02:19 PM
| Claire Hack
LONDON The London Metal Exchanges warehousing regulation changes wont have a major effect on the availability of aluminum to consumers, Robin Bhar, head of metals research at Société Générale SA, said.
Bhar argued that financing deals are still likely to continue to reduce the availability of metal, as there has been little change in the current low interest rate environment.
"On physical (aluminum) premiums, these should now be capped and a further moderate fall can be expected, which we believe will be offset by higher spot prices," he said.
Aluminum premiums fell after the LMEs initial announcement July 1 that it was proposing to link load-out rates to the length of queues, although they have recently firmed again and moved slightly higher.
Spot prices will rise as stock financiers remove metal from LME warehouses, bound for cheaper, private storage, which could lead to a decrease in market transparency, Bhar told AMM sister publication Metal Bulletin.....
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