Wednesday, October 8, 2014

UK court to issue ruling in London Metal Exchange/Rusal case

UK court to issue ruling in London Metal Exchange/Rusal case
(Reuters) - The Court of Appeal in London is due to hand down a decision on Wednesday in a case determining whether the London Metal Exchange (LME) can implement tough new rules to reduce the waiting times for withdrawing metals from the industry's warehouse stores.
A three-judge panel will either overturn or uphold a March ruling in favour of Russian aluminium company United Company Rusal that halted a key LME warehouse reform.
The decision is scheduled for Wednesday morning, according to the website of the Court of Appeal.
The original judgment ruled against the LME, the world's biggest industrial metals market, because the court regarded the consultation process as "unfair and unlawful".
The LME's new rules, originally due to take force in April, were aimed at making owners of warehouses deliver out at least as much metal as they take in.
But Rusal, the world's largest aluminium producer, feared the reforms could unleash a flood of supplies onto the market and depress aluminium prices.
Judges "reserved judgment" after a two-day hearing in July which revolved around the consultation process, not the actual warehouse reforms sought by the LME, which is now owned by Hong Kong Exchanges and Clearing Ltd 
Benchmark LME aluminium prices have shed about 30 percent since touching a peak around $2,800 a tonne in May 2011.
Industrial buyers of aluminium, used in transport and to make beverage cans, have had to wait up to two years to get delivery of metal from some LME warehouses and the new rules aim to cut the queues down to a maximum of 50 days.

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