But the recently announced London Metal Exchange rule change has left market participants wondering: why get into warehousing now?
There are a couple of companies up for sale, including JP Morgan’s Henry Bath and Goldman Sachs’ Metro International Trade Services. Other companies are evaluating whether or not to get into warehousing, while some others are deciding whether or not to get out.
Certainly, many of the factors that attracted banks and merchants to buy companies specialising in the storage of metal still remain.
A contango price structure, low interest rates and a surplus of metal have made LME warehousing more lucrative since 2008 than at any previous time.
That set of circumstances is likely...