LME takes aim at logjammed sheds with new load-out proposals

London Metal Exchange warehouse companies will be required to deliver out more metal than they draw in at storage locations where large load-out queues have developed, under new proposals the exchange has made after a review of its warehousing policy.

The new load-out model, which will be subject to a three-month stakeholder consultation, will link daily stock inflows and outflows to steadily reduce the queues that have developed to withdraw metal from locations such as Detroit, Vlissingen, New Orleans, Antwerp and Johor.
While the LME has previously taken action to make non-dominant metals that are stored in those locations more readily available to the market, the queues for the dominant metals in those ports have, in some cases, increased since its most recent changes came into effect in April, the LME said on July 1.
The increasing concentration of LME stocks in these locations has also exacerbated the effects of the queues on the function of warehouses as a market of last resort, as physical users have found less material available in other regional locations for prompt withdrawal.

For example, there were 283,100...


Mark Burton

July 01, 2013

11:26 GMT