HOTTER ON METALS: Warehouses – the LME’s leaky bucket

The debate over London Metal Exchange warehousing is starting to sound reminiscent of the old children’s song, “There’s a Hole in My Bucket”.

For those of you who don’t know the song, it is a discussion between Henry and Liza over how to fix a leaky bucket. Every solution is met with another problem; the two end up going round in circles with Liza increasingly frustrated at the not-so-bright Henry’s inability to grasp what is wrong. That seems to be how metals market participants feel today. In a recent poll by Luvata, one of the world’s biggest copper consumers, a whopping 77% of participants said the LME warehouse system is fundamentally broken. Almost two-thirds of them said they expect it to stay broken, while the rest held out hope for things to change. Only 23% of the total polled participants – made up mostly of Luvata customers with the rest being its suppliers, plus banks and trading firms – said the system is fundamentally sound. If so many people feel the LME warehouse...


Andrea Hotter

January 28, 2013

15:38 GMT

New York