But it’s becoming increasingly tricky to work out what a cancelled warrant actually represents.
The new proposal would force LME-approved warehouse firms with 30,000 tonnes or more of cancelled material, of which at least 30,000 tonnes is in a single, dominant metal, to deliver out an additional 500 tonnes of metals other than the dominant metal, if requested.
In theory, a cancelled warrant is metal owned by a market participant that is waiting to be delivered out of a warehouse.
In practice, cancelled warrants appear to have become part of the warehousing game that a few firms appear to be making a tidy fortune from.
The level of cancelled warrants has exploded in recent months. LME data shows that almost half the zinc stored in LME-approved warehouses is slated to be delivered out, along with nearly...