HOTTER ON METALS: Is it time for Charles Li to deal with warehousing?

Ever since Charles Li of Hong Kong Exchanges & Clearing (HKEx) said he would take a proverbial bazooka to the issue of queues at the London Metal Exchange’s network of warehouses, the metals market has been waiting on tenterhooks for it to happen.

Don’t hold your breath. Li said in October that he would use a bazooka if consumers were being forced to wait for a year or more to obtain metal, rather than having to simply pay a premium to get it more promptly. In a November interview with Metal Bulletin, Li clarified his by-then infamous bazooka comment by saying he would only act in that way if he had proof that warehouse queues are being deliberately created. He also said that despite the industry’s negative focus on warehousing, nobody had yet articulated a problem that suggested the system was broken. His views may have changed over the course of the past seven months, but acting like a bull in a china shop over the issue is not Li’s style, at least not so far. A fresh industry-wide warehousing consultation, gauging and assessing the views of a variety of metals market participants...


Andrea Hotter

June 25, 2013

11:40 GMT

New York