Share, , Google Plus, Pinterest,

Posted in:

LME Roundup – May 20 through June 17

May 20 – “Exclusive: Goldman puts Metro metals warehousing unit up for sale,” Reuters

Some U.S. lawmakers welcomed news that Goldman is taking steps to exit the metals warehousing business that end-users such as Coca-Cola Co and MillerCoors, which use aluminum to make beverage cans say has led to long wait times and inflated physical metal prices.

“Today’s announcement is a victory for beer and soft drink makers and for the safety and soundness of our financial system,” said Senator Sherrod Brown, an Ohio Democrat and staunch critic of banks’ involvement in the physical commodity business, in a statement.

May 23 – “Aluminium weakens by 0.2% on global cues – Traders pare positions as subdued demand at home fuels negative sentiment,” Business Standard

May 28 – “China restarting idle aluminium capacity as prices rebound,” Business Recorder

Chinese aluminium smelters are restarting some idled capacity after prices of the metal rebounded from five-year lows hit in March, also taking advantage of lower power costs promised by a province in the southwest, industry sources said.

The restarts could again drag on domestic prices in the world’s top producer and consumer of aluminium, triggering higher exports of both primary aluminium and its products and in turn weighing on the global market.

May 28 – “LME Aluminium likely to rally towards $2100/tonne: NBang,” MoneyControl.com

Nirmal Bang has come out with its report on LME Aluminium. The research firm believes that at least next one and half quarter will be positive for the metal and it is likely to hit the upside level of $2100/ tonne and $2200/tonne in the coming months. 

May 28 – “UPDATE 1-Aluminium producers seek record premium of $405-410 from Japan buyers,” Reuters

May 29 – “European aluminium premiums reach new highs on short-term bidding,” Metal Bulletin

High premiums have discouraged consumers from booking forward deals, with many buying only short-term volumes in the vain hope that premiums would ease this year. Almost none are buying beyond the next three months, and many deals are considerably shorter than that. “Customers have not bought forward, so they need to buy metal on an almost weekly basis,” a trader said. “And it’s not small volumes. They are bidding up the premiums themselves.” This strategy has continued despite a ruling by the UK High Court that stopped the application of the London Metal Exchange’s proposed new warehouse load-out rules in April – rules that many had assumed would lead to lower premiums.  That ruling is now subject to appeal, and, in the meantime, the short-term buying by consumers in a ruthlessly tight European market.

May 29 – “LME aluminium may retest support at $1,831,” Business Recorder

May 29 – “Brazil’s aluminium premiums unchanged on weak market,” Metal Bulletin

The slowdown of the Brazilian economy and growing concerns about energy costs in the country are the main factors behind the current weak activity in the local aluminium spot market, where premiums remained unchanged this week.

June 4 – “London Metal Exchange to appeal against warehouse ruling,” Reuters

A successful appeal could allow the exchange to carry through planned rules aimed at slashing waiting times of up to two years for industrial companies to gain access to metal stored in LME-approved warehouses.

“We welcome the opportunity to challenge the decision of the judge at the first instance at a hearing scheduled to take place on 29-30 July 2014,” an LME statement.

June 5 – “METALS-Aluminium up on warehouse court case, copper slips on port probe,” Reuters

June 10 -“China warehouse probe may help LME,” American Metal Market

An investigation into alleged fraud involving copper and aluminum at the Chinese port of Qingdao could be the trigger to push a network of London Metal Exchange warehouses across China back up the agenda.  The probe into alleged fraud relates directly to the possibility that warehouse receipts for metal stored in a section of the port were falsified and issued multiple times in order to raise capital.  

While one can never say never, it’s a situation that would be highly unlikely to happen within the LME’s warehouse network, primarily due to LMEsword, the exchange’s system for recording the ownership of LME warrants. With this system, warrants are essentially placed with a central depository appointed by the exchange, which records the particular warrants that are held on behalf of identified account holders. Each warrant is produced to a standard format and includes a unique barcode.

June 12 – “Column – Alloy turbulence may be a sign of what awaits aluminum,” by Andy Home, Reuters

Someone delivered 1,860 tonnes of North American alloy into London Metal Exchange (LME) sheds in Detroit last week. Hardly earth-shattering stuff, you might be thinking, given the huge stock movements that have come to characterize the CME’s primary aluminum contract in recent years. But the significance of last week’s warranting of metal against the North American Special Aluminium Alloy Contract (NASAAC), to use its official name, was not its size but that it happened at all.

It was, in fact, the first delivery since August last year.  And it is a sign of the extreme turbulence that has gripped this most specialist and bespoke of the exchange’s contracts.

June 16 – “Smelter demand continues to support Chinese alumina prices,” Metal Bulletin

 

Share, , Google Plus, Pinterest,