LME rules changes may fuel ‘invisible’ stocks

Jan 15, 2014 | 01:59 PM | Michael Cowden

Tags  London Metal Exchange, LME, inventories, rule changes, price discovery, aluminum, nonferrous metals, Lloyd O'Carroll O'Carroll Aluminum Bulletin

FORT LAUDERDALE, Fla. — Changes to London Metal Exchange warehouse rules may have the unintended consequence of driving millions of tonnes of aluminum out of exchange-listed sheds and into "invisible" stocks, according to industry observers.

Such a trend means more transparency is needed in the aluminum market, some said, with one analyst calling for reporting requirements in commodities similar to those already in place for equities under U.S. Securities and Exchange Commission (SEC) rules.

"Transparency is critical to price discovery," said Lloyd O’Carroll, principal of the O’Carroll Aluminum Bulletin. "Wouldn’t it be nice if we actually knew who the warrant holders were?"

O’Carroll made the comments Jan. 13 during a panel discussion at the Platts Aluminum Symposium in Fort Lauderdale, Fla.....

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