HOTTER ON METALS: LME talks tough on warehousing ‘abuse’

The London Metal Exchange isn’t just rewriting the rules on warehousing, it is going to make sure that they are obeyed in spirit and in letter.

That was the clear message from the LME’s new management as the exchange announced a package of warehousing reforms, including a 50-day limit on delivery times. Notice has been given that the new regime would not be flexible and would be backed by far-reaching new powers of policing. This will include the right to question commercial practices in order to establish whether queues have formed for structural reasons, or due to abusive behaviour. If the latter is the cause of the queue, then the exchange would have the right to impose a higher load out rate requirement at that warehouse location. “It’s absolutely right that, after giving ourselves new powers in this way, we make sure the legal underpinning for it gives us the full powers we need for enforcement policing,” Matt Chamberlain, LME’s head of business development, said. “We have made a set of changes to the warehouse agreement today...

Published

Andrea Hotter

November 08, 2013

05:00 GMT

New York