New LME Warehouse Rules, Base Metal Prices Roundup: Aluminum Down

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The London Metal Exchange (LME) – with a kick in the pants from its new owner, Hong Kong Exchanges & Clearing (HKEx) – is glacially moving toward new LME warehousing rules.

With this problem being one that HKEx’s CEO said he wanted to take a bazooka to, Jack Farchy, in the FT, notes “the LME’s proposal would force warehouses with queues of at least 100 days – which traders say exist at warehouses owned by Glencore’s Pacorini unit, Goldman’s Metro unit, and Trafigura’s Nems – to deliver metal out at a rate of at least 1,500 tonnes a day more than is brought in.”

Will this change anything?

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“That should have the effect, over time, of reducing the length of queues, although the process may be slow. For example, at Glencore’s warehouses in Vlissingen in the Netherlands, where traders must wait some 450 days to take delivery of aluminium, it could take more than two years under the new rules before the queue was reduced to 100 days,” Farchy writes.

The LME makes it very clear that this will be a very, very slow process – which begs the question, is it better to propose new rules yet not actually fix anything for ages, or just stay quiet? Regardless, the LME aluminum inventories will still not be seeing much light of day.

Today’s Aluminum Prices

On Friday, June 28, the day’s biggest mover was the price of Chinese aluminum billet, which saw a 3.1 percent decline. The cash price of Chinese aluminum held steady. The price of Chinese aluminum bar remained essentially flat. The price of Chinese aluminum scrap held steady.

today's metal prices - MetalMiner IndXHowever, the cash price of primary Indian aluminum rose 3.1 percent.

Meanwhile, last Friday a price drop of 0.8 percent carried the aluminum 3-month price to a 30-day low of $1,764 per metric ton on the LME. The primary aluminum cash price fell 0.8 percent to a 30-day low on the LME of $1,719 per metric ton last Friday.

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Current Copper Prices

The day’s biggest mover was the cash price of Japanese copper which dropped by 1.3 percent on Friday, June 28.

The price of US copper producer grade 110 increased 0.3 percent. After a 0.3 percent increase, the price of US copper producer grade 122 finished the day up. The price of US copper producer grade 102 finished the market day up 0.3 percent per pound.

Chinese copper closed mixed last Friday. The price of Chinese copper wire weakened by 0.5 percent. Chinese copper bar finished the day down 0.5 percent. The Chinese copper cash price declined 0.5 percent. Chinese bright copper scrap saw little change in its price last Friday.

On the LME, the primary copper cash price rose 0.3 percent to $6,705 per metric ton. Also on the LME, the copper 3-month price inched up 0.2 percent to $6,731 per metric ton.

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