HOTTER ON METALS: Aluminium mathematics

How can a near-40% decline in outright aluminium prices since the financial crisis end up costing buyers of the metal some $3 billion per year?

That's what some of us were asking after a senior executive of US brewer MillerCoors gave testimony to the US Senate subcommittee set up to discuss the role of US holding banks in physical commodities. Tim Weiner, the brewer’s global risk manager for commodities and metals, said the queues to get metal from Detroit warehouses owned by Goldman Sachs' subsidiary have been caused by the LME rules, and have pushed premiums to record and artificially high levels. That premiums have risen dramatically because of the queues is true. But as the London Metal Exchange pointed out, the total price per tonne paid by consumers for aluminium has dropped by almost 40% since July 2008. Although premiums – which are not traded on the LME – have risen...


Andrea Hotter

July 26, 2013

04:53 GMT

New York