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LME Roundup – U.S. Aluminum Producers Take Aim at China

October 7 – “LME rules strain trader-warehouse storage talks,” American Metal Market

“LME warehouse reforms to cap rents for material covered by warrants that have been canceled for more than 30 days, as well as to control “excessive incentives,” have made warehouse companies wary about bidding for aluminum.”

October 8 – “New Products,” London Metal Exchange

“There will be four regional aluminium premium futures – designed for hedgers and traders everywhere.

LME Aluminium Premiums are new contracts designed specifically to help the physical industry hedge the premium portion of the ‘all-in’ aluminium price.The four regional premium contracts sit alongside our parent LME Aluminium contract, combining global liquidity with regional flexibility.”

October 8 – “LME signs up 9 warehouse firms for new aluminium premium contracts,” Reuters
October 20 – “Aluminum’s losing streak extends to sixth day on glut concerns” Bloomberg Business

“Aluminum fell for a sixth day, the longest slump in three months, on concern that a glut will worsen amid weakening demand in China, the world’s biggest metals consumer. The Asian nation is boosting aluminum production at the same time that economic growth is expected to be the slowest in decades, adding to the outlook for a global surplus. Dwight Anderson, the founder of hedge fund Ospraie Management, said he saw little reason for short-term optimism on industrial metals.”

October 21 – “The LME supports China’s ‘The Belt and Road’ initiative,” London Metal Exchange

“The LME and LME Clear recently signed a memorandum of understanding with a group of key Chinese and UK financial institutions, pledging to work together to offer Chinese participants greater access to global commodities markets.”

October 22 – “Primary Aluminum market records deficit during Jan–Aug ’15,” Scrap Monster

“The latest report published by the World Bureau of Metal Statistics (WBMS) indicates that global primary aluminum market has recorded a deficit during the initial eight months of the year. As per the report, the market reported a deficit of 257,000 tons when matched with the deficit of 654,000 reported during entire year 2014.”

October 23 – “Half of world’s aluminium smelters not profitable, price could fall below $1 200/t,” Mining Weekly
October 27 – “Low LME aluminum price stokes supply fears,” American Metal Market

“Further aluminum production cuts could be looming in North America, some domestic suppliers predicted as exchange prices for the metal moved below levels last seen in min-2009.”

October 28 – “Commencement of LME Market Making Programmes,” London Metal Exchange
November 4 – “Century Aluminum targets China as U.S. smelters fight for survival,” Reuters

“At least one U.S. aluminum producer may be hunkering down for a trade dispute with top-producer China, as the beleaguered aluminum industry fights for survival amid high labor and energy costs and prices at a six-year low. Century Aluminum Co, controlled by Swiss trader and miner Glencore Plc, is leading an aggressive campaign to fight China’s aluminum exports that it says threatens the U.S. industry.”

November 9 – “USW Joins China Trade Task Force in Campaign to Combat Illegal Chinese Aluminum Subsidies,” Reuters
November 19 – “CME Group Expands Base Metals Offering with New Aluminum Japan Premium (Platts) Futures,” CME

CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will expand its base metals offering with the introduction of a new Aluminum Japan Premium (Platts) futures contract to begin trading on 7 December 2015. Pending relevant regulatory review periods, the new contract will be available for trading on CME Globex and for submission for clearing through CME ClearPort, and will be listed with and subject to the rules and regulations of COMEX.

“This new contract complements our offering of U.S. and European aluminum premium futures contracts, and enables market participants to hedge their exposure to the Asian aluminum premium,” said Young-Jin Chang, Senior Director of Metals Products, CME Group. “Market participants in Asia have demanded a solution in hedging their premium exposure, and with the growing sophistication and participation of Asia in global aluminum pricing, we are pleased to offer this new Aluminum Japan Premium (Platts) futures contract to better address our customers’ needs.”

November 20 – “Century Aluminum considering launching trade case against China,” Reuters

“Century Aluminum Co is in talks with U.S. authorities over options for stemming a flood of cheap metal imports from China, including a trade case that could bring the escalating dispute to a head, Chief Executive Officer Michael Bless said on Friday. A move against China could come soon, possibly with the support of the United Steelworkers union, he told Reuters.”

November 23 – “Aluminum market expected to improve in 2016,” American Metal Market

“Aluminum market fundamentals will improve in 2016, with China finally bowing to economic pressure to back of the subsidization of high-cost aluminum smelting, according to ING Groep NV.”

November 26 – “Metal prices rebound on output cut hopes,” Financial Times

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