CFTC to meet with Alcoa on LME warehouse reform

The chairman of the US commodities regulator and an executive from aluminium producer Alcoa Inc will meet this week to discuss metals warehousing reform, a spokesman for the agency said on Tuesday. The meeting between US Commodity Futures Trading Commission (CFTC) chairman Timothy Massad and Alcoa Chief Financial Officer Bill Oplinger will take place on Wednesday afternoon. The meeting comes as the aluminium company has ramped up public criticism of the regulator's intervention in the London Metal Exchange's (LME) warehousing reform plan.

The dispute highlights aluminium producers' concerns about the impact of LME rule changes on sinking prices. Recent LME reforms have increased the rate at which metal must be delivered out of warehouses, a response to controversial financing deals, and aluminium has flooded the market partly as a result. In a letter late last month, Alcoa general counsel Max Laun asked the CFTC to retract a letter announcing its decision to delay ruling on the LME's application to register as a "foreign board of trade" in the United States.

The letter accused the CFTC of overstepping by attempting to regulate a foreign exchange while pushing for the LME, the world's oldest and biggest market for industrial metals owned by Hong Kong Exchanges and Clearing Ltd to introduce other reforms, including a cap on warehouse rents. Laun also requested a meeting between Massad Oplinger for the week of Monday, August 24.

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