Aluminum Leaving LME Seen by Jefferies Increasing Volatility
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Aluminum is exiting warehouses tracked by the London Metal Exchange at the fastest pace in a decade, leaving investors with less information about the market and possibly more volatility.
Banks and traders are moving metal to cheaper facilities outside the LME network, a tactic to save money as profits from one of the most common trading strategies shrink, according to analysts at Jefferies Group LLC and INTL FCStone Inc. About two-thirds of the metal exiting LME depots this year ended up in warehouses not monitored by an exchange, Macquarie Group Ltd. estimates.