LME warehouse firms fear rental income plunge after load-out rate crackdown

London Metal Exchange warehouse companies expect that the bourse’s new proposals to link load-in and load-out rates at logjammed storage locations could have a dramatic effect on their business models.

For warehouse companies that are currently profiting from the large queues to load out material from locations such as Detroit, Vlissingen, New Orleans, Johor or Antwerp, the proposals could lead to a dramatic downward revision to rental income. “We still need to formulate a response internally, but at this stage it’s clear that this will hurt our business tremendously in those locations where there are queues,” a source at one warehouse company told Metal Bulletin. But for other warehouse operators – which have struggled to compete with the incentives that the queues have enabled their rivals to offer – the LME’s proposals represent a big opportunity to regain their competitive edge in the day-to-day business of trying to attract metal...

Published

Mark Burton

July 02, 2013

21:14 GMT

London