Laying out its three lines of defence against the possibility its new warehousing rules will lead to higher costs for market users storing metal, the exchange made it clear that it will do everything in its power to bring warehouses back into line.
A full review of the exchange’s powers to limit rent and the cost to deliver material out, known as the free on truck (FoT) charge, is now likely, the LME’s new chief executive Garry Jones says.
The review is unlikely to be completed until 2014.
Currently, European Commission competition law prevents the LME from setting, capping, or influencing rents to store metal and FoT rates.
Jones said the exchange is not trying to interfere in the market, but needs to ensure its warehousing system and LME market place remains credible.
“It’s not that we’ve had a long-standing policy one way or the other; we have to...