In an interview in Moscow, Oleg Deripaska said the LME’s network of approved warehouses reflects past areas of net consumption, and not the present and future, rendering it a poor reflection of customer needs.
“The old LME was about Europe and the United States. The new LME should be about Asia, Southeast Asia, and new growth locations. It’s actually a waste of time [putting metal in a warehouse] if you need to put another load on a ship to get material from a warehouse to a customer,” Deripaska said.
“It’s not about the old warehouses – there should be incentives to actually adjust warehouse positions to where consumption is. We have consumption in one place, mostly in Asia, and we have warehousing in Europe, where consumption is almost flat,” he added.
Several LME locations have little or no metal in official storage. Bremen in Germany, for instance, has...