LME Reforms’ Unintended Consequences; New European Trading Platform Launched

by Jeff Yoders on NOVEMBER 1, 2016
LME week is upon us and one of the stories coming out of London is how reforms to end long lines have distorted the metal’s supply picture. A new European metals trading platform has been launched.

Aluminum’s Fundamental Picture
Reforms to the London Metal Exchange‘s global warehouse network have, as planned, cut the amount of metal trapped in storage, but the unintended consequence is a distorted fundamental picture and more pressure on already tumbling volumes.
Since 2013, the LME has implemented measures aimed at reducing queues for aluminum as it leaves warehouses after banks and traders that own them profited from letting long queues build up while charging rent.

New German Metals Trading Platform
A new trading platform for buying and selling of base metals for immediate physical delivery was launched in October by German company Metalprodex GmbH, with the most initial trading liquidity in aluminum and lead, the company’s head said.
Newly established Metalprodex is offering an electronic trading platform enabling delivery of physical metal within two days.

Source: agmetalminer