UPDATE 1-LME changes hurt aluminum premiums -Alcoa executives

Tue Oct 8, 2013 7:24pm EDT
 
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* LME 'very irresponsible' for warehousing action -Kleinfeld

* Financing deals providing some support to falling premiums

* Metal is moving into off-exchange storage

NEW YORK, Oct 8 (Reuters) - Global aluminum premiums have fallen due to "confusion" over the London Metal Exchange's proposal announced on July 1 to overhaul its warehousing policy, Alcoa Inc Chief Financial Officer and Vice President William Oplinger said on Tuesday.

Premiums paid on top of the LME benchmark price have dropped 17 percent in Europe, 4 percent in Japan and 11 percent in the United States in just three months, he said.

The comments came as Alcoa Chairman and Chief Executive Officer Klaus Kleinfeld lashed out at the LME's latest proposal to solve a years-long crisis that has damaged the exchange's reputation and cost industrial users billions of dollars in additional expenses.

In Tuesday's conference call, Kleinfeld said the LME was "very irresponsible" by going public with its proposal without consulting the industry first.

The call followed the release of better-than-expected third-quarter results as cost cutting efforts offset weak LME prices.

Alcoa executives also renewed their call for the LME to improve transparency by publishing more data and to establish a regional premium contract as a way to solve a long crisis that has damaged the 136-year old exchange's reputation.   Continued...