INTERVIEW: LME warehouse changes will push more metal off-warrant, Rusal executive says

The new London Metal Exchange warehouse rules will lead to a flow of aluminium to off-warrant storage but will not address consumers’ complaints against high physical premiums, a senior executive at UC Rusal has said.

Rusal’s deputy ceo and director for strategy and business development, Oleg Mukhamedshin, told Metal Bulletin that the warehouse reforms will not have a fundamental effect on the price for producers. This is due to the positive returns it continues to provide for investors through financing deals, along with growing supply-demand tightness, he explained. “Metal currently sitting in LME warehouses is mostly owned by financial investors, which makes a good return of 8% per year out of the contango,” he told Metal Bulletin. “Investors’ interest and profit is driven not only by low interest rates but also by the ability...

Published

Andrea Hotter

December 05, 2013

20:17 GMT

New York