In a conference call following the outcome of the court case brought by the company against the LME, Hodgson stated that the original proposal of a linked load-in load-out rate risked forcing metal into warehouses not registered with the LME.
“The proposal in its current form would accelerate the transfer of metal from on-warrant warehouses to off-warrant warehouses,” he said during the call.
“The advantage of keeping metal on-warrant is that the LME can keep track of it.”
The fundamental issue, according to Hodgson, is warehouse competitiveness, and Rusal believes this would not have been addressed by the linked load-in load-out rate.
“It’s simply not competitive for metal holders to keep metal in a relatively expensive warehousing system,” Hodgson said.
“Our understanding is that the majority of trade on the LME is actually done for financial purposes […] it’s a form of speculation and it’s added very much to the...