Small and medium-size recycling companies would lose their ability to hedge if the London Metal Exchange changes its margin methodology, an executive at metal recycling company European Metal Recycling (EMR) said.
According to Murat Bayram, EMR managing director for non-ferrous Europe, the proposed change from a Discounted Contingent Variation Margin (DCVM), which realizes forward profits on the settlement date, to a Realized Variation Margin (RVM), which pays profits on a trade date + 1 basis, is not the solution."Credit lines give us the security so that by the time we get the goods, dismantle, sort, analyze and bring them to the smelter, we don't need to worry that...