LME rules changes may fuel ‘invisible’ stocks

Changes to London Metal Exchange warehouse rules may have the unintended consequence of driving millions of tonnes of aluminium out of exchange-listed sheds and into “invisible” stocks, according to industry observers.

Changes to London Metal Exchange warehouse rules may have the unintended consequence of driving millions of tonnes of aluminium out of exchange-listed sheds and into “invisible” stocks, according to industry observers. Such a trend means more transparency is needed in the alu minium market, some said, with one analyst calling for reporting requirements in commodities similar to those already in place for equities under the US Securities and Exchange Commission (SEC) rules. “Transparency is critical to price discovery,” Lloyd O’Carroll, principal of the O’Carroll Aluminium Bulletin, said. “Wouldn’t it be nice if we actually knew who the warrant holders were?” O’Carroll made the comments on Monday January 13 during a panel discussion at the Platts Aluminium Symposium in Fort Lauderdale, USA. Other information that should be disclosed includes the...

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This article was first published by AMM

January 16, 2014

04:52 GMT

Fort Lauderdale