Rusal has decided to take legal action, “aimed at having the London Metal Exchange (LME) overturn planned reforms to its warehousing policy, worried about further falls in the price of its metal,” reports Reuters.
“The judicial review sought by the loss-making Russian company comes as the LME defends itself against U.S. lawsuits alleging the exchange, two of Wall Street’s biggest banks and big commodity merchants conspired to raise the price of aluminum.”
“Rusal’s dramatic action underscores the difficulty facing the LME as it tries to fend off criticism over its handling of a years-long crisis over warehousing.”
“The stakes are also high for the LME’s owner, Hong Kong Exchanges and Clearing Ltd, as it seeks to restore confidence among traders, producers and consumers who use the LME’s prices to buy and sell metal across the world. The Hong Kong exchange bought the LME last year for some $2.2 billion.”
“The LME is caught between producers such as Rusal who fear rule changes could lower aluminium prices, deepening their losses, and industrial users who have long complained that prices have been propped up artificially.”
The price of Chinese aluminum scrap fell 3.5 percent on Wednesday, December 25, making it the day’s biggest mover. After three days of flat prices, it closed. The Chinese aluminum cash price fell 0.4 percent to a 30-day low yesterday. The price of Chinese aluminum bar was unchanged. The price of Chinese aluminum billet saw essentially no change for the fifth day in a row.
On the LME, the 3-month price of aluminum fell 0.5 percent to $1,755 per metric ton. The cash price of primary aluminum saw a 0.5 percent decline on the LME to $1,709 per metric ton. The Indian aluminum cash price showed little movement yesterday.