Alcoa warns warehouse reforms could affect premiums

|By:, SA News Editor

Alcoa (AA) is warning that if newly proposed warehousing rules are approved, premiums it charges for physical metal delivery will likely shift.

The company has also replied to SEC inquiries regarding the matter, saying if the reforms are passed, more aluminum can hit the physical market, hitting the premiums paid by customers who need physical delivery of the metal.

Aluminum producers and Alcoa earn a premium above the London Metal Exchange benchmark price from buyers needing an actual delivery, with some premiums hitting record highs this year.