It would perhaps be wise for the LME to use its six-month review of warehousing – supervised by ceo Martin Abbott, deputy ceo Diarmuid O’Hegarty and head of physical operations Robert Hall – to first evaluate whether or not a recent move in this direction with nickel and tin is working properly.
In August, the LME ruled that warehousing firms delivering out 3,000 tonnes a day of aluminium must also deliver out, if requested, an additional 60 tonnes of tin or nickel, or a combination of both metals, each day.
The changes take effect on April 1 next year, but companies have been allowed to start implementing the procedures already. It is still early days, but all indications are that the warehousing firms are not objecting to the new requirement. An additional 60 tonnes of nickel is not enough to interest a warehouse destocker, but satisfies a genuine consumer.