London Metal Exchange under fire from US, UK and China

LME

Alcoa complains to UK, US regulators about warehousing

Alcoa Inc, the world’s second-largest aluminium producer, has complained to British and U.S. market regulators about a proposal by the London Metal Exchange to overhaul the LME’s warehousing policy. The LME must suspend its plan to change warehousing or risk damaging the entire aluminium market, Alcoa said in a letter to the UK’s Financial Conduct Authority and the U.S. Commodity Futures Trading Commission. The LME, the world’s biggest marketplace for industrial metals trading, has proposed rules that would force warehouses to release more stocks than they take in if deliveries are delayed by three months or more.

See http://www.mineweb.com/mineweb/content/en/mineweb-fast-news?oid=209542&sn=Detail.

China says no to LME warehouses in Shanghai free trade zone

Despite high expectations of the contrary, the London Metal Exchange will not be opening warehouses in China’s new Shanghai free-trade zone (FTZ). The Chinese government has decided to uphold the ban on warehouses run by overseas commodity exchanges, Reuters reports.

See http://www.mining.com/china-says-no-to-lme-warehouses-in-shanghai-free-trade-zone-12436/.

UK financial watchdog checks on commodity warehouses

Britain’s financial watchdog said officials are visiting commodity warehouses in Europe to see how they operate, in preparation for tough new EU market abuse rules as regulators focus unprecedented scrutiny on physical trading practices. For decades, traders have made money from their knowledge of shortages and surpluses of physical commodities, which they say enables them to play a vital role in balancing global markets. But pressure from campaigners and politicians to crack down on what they see as speculators pushing up commodity prices, coupled with concern over possible rigging of market benchmarks, are putting commodities on a tighter regulatory leash in Europe.

See http://www.mineweb.com/mineweb/content/en/mineweb-mining-finance-investment-old?oid=208846&sn=Detail.

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