The U.S. aluminum producer and Rusal have staunchly criticized the
LME for implementing changes, which will speed up the rate at which
metal is delivered out of storage locations and is expected to
pressure the physical prices of aluminum.
In a dramatic move last month Rusal — the world's biggest aluminum
producer — filed a lawsuit against the LME, demanding the world's
oldest and largest metals exchange, scrap the changes.
"We understand where those folks are coming from," Kleinfeld said in
a conference call to discuss Alcoa's fourth-quarter earnings, as it
posted a net loss of over $2 billion.
"At this time, we don't have any plans to file a suit against the
The LME is under intense political, legal and regulatory scrutiny to
overhaul its warehousing policy, which according to end users, has
led to inflated physical prices and distorted supplies even as the
market is awash with massive oversupply.
The LME's new rules are due to come into effect in April.
On Thursday, Kleinfeld again said he welcomed the LME's efforts to
increase transparency and its pledge to consider a new product
linked to physical premiums, but called on the exchange to set out a
timeline for introducing the changes.
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High premiums paid on top of the benchmark LME for physical delivery
of metal are particularly important for producers as they have
provided an important cushion against weak LME prices.
Both Rusal and Alcoa have reported losses. LME prices are close to
or below the cost of many producers' production.
(Reporting by Josephine Mason; editing
by Steve Orlofsky, G Crosse)
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