The world's metal is slipping into the shadows.
Banks,
hedge funds, commodity merchants and others are stashing tens of
millions of tons of aluminum, copper, nickel and zinc in a hidden system
of warehouses that span the globe.
These
facilities are known to some in the industry as "shadow warehouses"
because they are unregulated and don't disclose their holdings.
They operate outside the London Metal Exchange system of warehouses, the traditional home for these metals.
As
of October, a record seven million to 10 million tons of aluminum were
being housed in these facilities, in countries as far apart as Malaysia
and the Netherlands, according to estimates from several analysts.
Key wording
As a result, producers and consumers are bracing for potentially wild swings in metals prices as market participants have difficulty accurately gauging supplies of these metals. With no clear insight into how much metal is in the shadow system, setting prices will become increasingly difficult, they say.
Key wording
As a result, producers and consumers are bracing for potentially wild swings in metals prices as market participants have difficulty accurately gauging supplies of these metals. With no clear insight into how much metal is in the shadow system, setting prices will become increasingly difficult, they say.
Note: May be behind a pay wall copy and paste the title in Google
Get yours while the getting is good.
Get yours while the getting is good.
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