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(AMM) Warehouses rein in aluminum incentives
July 29, 2010 - 23:48 GMT
Location:
New York
KEYWORDS:
LME warehouses
,
aluminum
Warehousing companies in the United States are reducing the incentives they are willing to pay to entice aluminum in a dramatic reversal in strategy, market sources told AMM.
The move could put downward pressure on U.S. premiums, market sources said, since consumers will not be competing with the warehousing companies to get hold of metal.
"Warehouses are starting to scale back their incentives. We got a call (from a trader) about it," said one warehousing source whose company had stopped offering incentives earlier this year because he could not compete with his rivals offering incentives of triple-digit sums.
With competitors reining in their incentives, however, the source said he was receiving interest from the trade once again.
"They were as high as $130 and are dropping from there," he said of other warehouses' record incentives.
Other market players confirmed that some of the warehouses are pulling back when it comes to incentives.
"I know they've been cut back quite aggressively," said a Category...
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Euromoney Institutional Investor PLC.
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