Warehouse incentives drop overnight after LME’s action on queues

London Metal Exchange warehouse companies are cutting the incentives they will pay to attract metal into locations such as Detroit in response to the bourse’s proposals to cut back the queues that have developed there, market sources told Metal Bulletin.

The incentive to bring aluminium into Metro’s warehouses in Detroit is believed to be about $195, down about $30 since the LME’s surprise announcement on Monday July 1, market observers claimed.
Pacorini – which is believed to have backlogged sheds in Vlissingen, New Orleans and Johor – and NEMS, the dominant player in Antwerp, are also recalculating the incentives they will pay to take in metal, sources said.
From next year, the LME will require warehouse companies to deliver out more metal than they load in at locations where the queue to withdraw metal is 100 days or more.

Based on the length of the current load-out queues, the locations most affected by the change will be Vlissingen and Detroit – where the majority of LME aluminium is stored –...

Published

Jethro Wookey

Mark Burton

July 04, 2013

07:45 GMT

London