Exclusive: Vitol plans to cut costs by taking aluminium from LME warehouses in Malaysia, sources say

Pratima Desai - Reuters - 09/01
Energy and commodities trader Vitol is attempting to reduce its storage costs with plans to remove significant amounts of aluminium from London Metal Exchange (LME) warehouses in Port Klang, Malaysia, three sources familiar with the matter said.
  • Metal earmarked for delivery at LME warehouses jumped on Monday
  • Long queues to take metal out of LME warehouses in Port Klang
  • Indian aluminium in Port Klang sought after
LONDON, Jan 9 (Reuters) - Energy and commodities trader Vitol is attempting to reduce its storage costs with plans to remove significant amounts of aluminium from London Metal Exchange (LME) warehouses in Port Klang, Malaysia, three sources familiar with the matter said.
LME approved warehouses charge 56 U.S. cents per metric ton to store aluminium in Port Klang, about five times more than rent charged for metal outside the LME's warehousing system.
Vitol, which declined to comment on its plans, is ramping up its presence in global metals markets after a previous foray into base metals ended in 2014. It maintained a presence in alumina, which is used to produce aluminium, until 2018 and in iron ore until 2017.
LME queue-based rent capping (QBRC) rules stipulate a warehouse company can only charge fees to store metal for up to 80 days after the firm that owns it has given notice of its intention to take delivery. No rent can be charged after 80 days, so companies in the queue for longer pay no charges.
Metal earmarked for delivery at LME regis...
[Short citation of 8% of the original article]