LME WAREHOUSING: How warehousing affects the metals market

The London Metal Exchange’s three-month consultation on warehousing reform amounts to one of its biggest engagements with the metals market on any single issue.

It received 33 written responses from, and held more than 70 meetings with, stakeholders including producers, consumers, merchants, banks, brokers and warehouses. Here are four key excerpts from its 76-page write-up of the consultation that reveal how participants in the metals market view the warehousing problem, and how they have been affected by it. Is there even a problem? Categorically, yes: No respondent suggested that there is not some form of problem with the LME system – and, as such, no respondents have suggested that action should not be taken. [Those] who perceive themselves as benefiting from the current system would likely, in the absence of broader market noise, have said that no problem exists. However, given the degree of obvious disquiet in the market, such players have recognised from a tactical perspective...


Mark Burton

November 11, 2013

12:17 GMT