Copying and distributing are prohibited without permission of the publisher
Warehouse queues caused by market forces – Alcoa exec
January 28, 2013 - 11:40 GMT
Free market forces have combined to create the debate about London Metal Exchange warehousing, but that does not necessarily mean there is a problem, a senior Alcoa executive has said.
"To have a solution [for the warehousing queues], there
needs to be a problem, and I don’t think this is
actually a problem," Tim Reyes, head of materials management at
the US producer, told Metal Bulletin in an interview.
"We’ve got a series of free market forces at work
that have led us to where we are," he said. These forces stem
from the downturn of 2008, which caused a slump in demand for
aluminium in key consuming markets and led to metal flowing
into warehouses as low interest rates and a contango market
structure encouraged financing deals. Lengthy queues to get
material out of warehouses have arisen in locations including
Detroit, New Orleans and Vlissingen, leading to a huge industry
debate over who is to blame and what can be done about it.
A significant portion of metal is sitting off warrant and not
in warehouses approved for storage by...
All material subject to strictly enforced copyright laws. ©
Euromoney Institutional Investor PLC.
Please log in using your online subscriber details.
Your username will be your registered email address with Metal Bulletin.
If you aren't a subscriber yet, feel free to take a seven day free trial, or subscribe using the instructions below.
A standard subscription include one year's worth of news and prices. You can also upgrade to the full archive and benefit from more than 15 years of intelligence. Start your subscription today.
Taking a free trial will give you open access to Metal Bulletin online news, prices, archived content and email alert service for the next seven days. Start your free trial today.