Warehouses back away from incentives

After months of paying high incentives to get aluminium, zinc and copper into storage, warehouse firms have gone shy.

The proposed changes to the London Metal Exchange’s warehousing rules have already led warehouses to back away from attracting material into locations with long queues to access metal, a move they say will continue while they fully evaluate the implications of the new scheme. Glencore Xstrata’s Pacorini, Goldman Sachs’ Metro and Trafigura’s NEMS are the three big warehousing firms most impacted by the rules, which will link load-in and load-out requirements at locations with delivery wait times of over 100 calendar days or more. Vlissingen, dominated by warehouse firm Pacorini, is estimated to have typically averaged a daily load-in rate of around 7,000 tonnes this year; Metro-dominated Detroit has delivered in around 3,000 tonnes daily. Warehouse companies with less material in storage will not be affected by the new delivery requirements, and will probably benefit by receiving material that firms with more material stored are...


Andrea Hotter

July 22, 2013

17:30 GMT

New York