Global aluminum premiums have fallen due to "confusion" over the London Metal Exchange's proposal announced on July 1 to overhaul its warehousing policy, Alcoa Inc Chief Financial Officer and Vice President William Oplinger said on Tuesday.
Premiums paid on top of the LME benchmark price have dropped 17 percent in Europe, 4 percent in Japan and 11 percent in the United States, he said.
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While they have been under pressure, they have found some support from financing deals, which keep the metal locked up in long-term storage deals and therefore off the market.
In financing deals, traders store metal in warehouses due to low borrowing costs and a wide forward pricing.
Market participants have increased the rate at which they move metal out of LME-registered warehouses and into lower-cost storage facilities, he added. That has created a bigger stockpile of off-exchange stock.
(Reporting by Josephine Mason. Editing by Andre Grenon)