(Minews) - The International Aluminum Institute (IAI) has stopped reporting global inventory stocks, in another blow to transparency for a metal whose price, critics say, has been skewed by big banks and trading houses.
In a statement, the IAI said the aluminum stocks numbers it receives from global smelters had become incomplete to the point where it would be misleading to carry on reporting them.
Last year, a U.S. Senate investigation concluded that Wall Street banks had manipulated commodity prices and gained unfair trading advantages at the expense of consumers. The problem was especially acute in aluminum.
Owners of London Metal Exchange warehouses, typically big banks and trade houses, have in the past held back supplies in a bid to boost rental revenues. The strategy also inflated aluminum prices by causing premiums, paid to secure metal deliveries inside or outside the LME system, to soar.
Premiums are still inflated today despite unprecedented regulatory scrutiny and reforms to LME warehouse rules. As such, further lack of clarity on global aluminum stockpiles is a blow to an aluminum market that still has pricing problems.
"(We) understand that many analysts ... have used the IAI inventory reports as part of their information-gathering process, however, we do not consider the data ... is now adequately reflecting a true picture of global producer stocks," said the IAI.
Problems began in the second half of last year when 35 smelters, or up to a third of smelters currently reporting stocks figures to the IAI, either stopped reporting or had difficulties reporting on a monthly basis.
