LME WAREHOUSING: LME’s view on warehousing, warrant trading, and ‘cynical’ CoT requests

Here are three key excerpts from the London Metal Exchange's 76-page write-up of its warehousing consultation that reveal the exchange's position on the major issues.

Rationale for CoT reports may be cynical: It is interesting to note that merchants, investment banks and funds will feature prominently in any [commitments of traders] reporting – both producers and consumers (whose views on the [100-day queue] Proposal are otherwise strongly divergent) feel that this information would be strategically useful, as it will allow them to point to the role of “middle-men” and speculators in the market as an explanation to their stakeholders for price movements which have adversely affected their businesses. Notwithstanding the potentially cynical rationale behind these requests, and the fact that the information will undoubtedly be used by market participants to level further criticism at the LME, the request for transparency is a reasonable one, given especially the fact that such...


Mark Burton

November 11, 2013

12:03 GMT