There are likely to be some inflows into warehouses, but the delayed rules will probably not change an awful lot.
That’s because the LME has retained the preliminary calculation period for the load in-load out rule, and because it’s currently more attractive to sell metal in the spot market than to put it into storage.
In a ruling that surprised many market participants, including the LME, the UK High Court found in favour of United Co Rusal on several points of its lawsuit against the exchange and forced new rules on warehousing to be delayed.
The LME is deciding whether to appeal, or to reconsult.
The effect is the same – a delay in the introduction of a change that many had thought was inevitable.
Historically high physical aluminium premiums have for some months been economically unviable for warehouse firms to match.
Even if a company opted to pay as much as...