November 13, 2013 / 3:46 PM / 6 years ago

EU antitrust regulators monitoring metals warehousing

LONDON/BRUSSELS, Nov 13 (Reuters) - European Union antitrust regulators are monitoring metals warehousing, a spokesman said, stopping short of following U.S. counterparts in conducting inquiries into access and cost problems caused by storage backlogs.

Metals consumers and U.S. lawmakers have accused some warehouse owners registered by the London Metal Exchange (LME) of concentrating metal in certain locations, artificially inflating waiting times to boost rents for warehouse owners and causing metal costs to rise.

“We are monitoring the situation,” the European Commission spokesman for competition policy, Antoine Colombani, said on Wednesday.

In August the U.S. Commodity Futures Trading Commission subpoenaed a number of major metals warehousing firms, including Glencore Xstrata, seeking documents and communications from the last three years for an inquiry into complaints about inflated metals prices.

After news of the CFTC probe, the European Parliament asked EU antitrust chief Joaquin Almunia five questions in August, including whether the Commission is considering a similar investigation.

In written replies last month, Almunia said the watchdog cooperates with U.S. regulators on antitrust matters in all industries and the commodity markets in particular.

“However, in order to protect the integrity of its monitoring and enforcement activities, the Commission believes that it would not at this stage be appropriate to comment on any action that might be taken in either Europe or the United States,” Almunia wrote in his replies posted on the European Parliament website.

The U.S. Department of Justice started a separate preliminary probe into the metals warehousing industry in July, sources familiar with the matter said.

Aiming to appease its critics and head off regulatory scrutiny, the LME announced plans last week to slash the maximum queues for metal, increase its powers to act against market abuse and review its agreement with warehouse owners.

Britain’s regulator, the Financial Conduct Authority, worked closely with the LME on the plan and said it was a step towards increasing transparency in the metals market.

LME warehouses hold 5.4 million tonnes of aluminium, but it is concentrated in only two locations <0#MALSTX-LOC>. Two-thirds of the total is piled up in sheds in Detroit and the Dutch port of Vlissingen.

The European regulator looks at cartels, price-fixing, market-sharing and monopoly behaviour. It has investigative powers and can impose fines of as much as 10 percent of global revenues on companies found in breach of EU competition law. (Reporting by Susan Thomas in London and Tom Koerkemeier in Brussels; editing by Jane Baird)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below