Alcoa stops short on supporting LME warehouse overhaul

Reuters

NEW YORK, Nov 7 (Reuters) - Alcoa Inc said onThursday it supports the London Metal Exchange's efforts toimprove transparency but the U.S. aluminum producer stoppedshort of endorsing the exchange's sweeping plans to overhaul itswarehousing policy.

The U.S. producer has criticized changes to storage rules,which were proposed by the LME in July and are aimed at ending acrisis over distorted supplies and increased prices for metalthat has plagued the exchange for years.

Last month, the company warned in a letter to the Britishand U.S. regulators that the proposal risked damaging the entirealuminum market.

Under regulatory and legal scrutiny and facing pressure fromangry metal consumers, the exchange announced on Thursday eventougher rules to deal with long wait times, which end-users sayhave inflated physical metal prices.

In a statement after the LME's announcement, Alcoa did notrefer to the warehousing policy changes and focused only onproposals to improve transparency and the LME's pledge toconsider launching new products linked to physical premiums.

A spokeswoman declined to comment on the new beefed-upstorage rules, referring Reuters back to the statement.

"The immediate next step is for the LME to provide a cleartimeline in which to implement this change," the statement said.

"Alcoa believes this is key to ensuring a more transparentsystem which increases fairness and improves market function."

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