HOTTER ON METALS: Premium contracts? Queue warehouses need not apply

Warehouse firms, take note: if you have a queue, you won’t be able to play the new premium contracts game.

That’s because new proposals being drawn up by the London Metal Exchange to protect users of its planned premiums contracts from warehouse queues will exclude those firms with wait times over 50 days. What’s more, the exchange is proposing that warehouses without queues, in the regions covered by the new contracts, and which opt to take storage of metal for the products, will have to deliver out a certain percentage of metal daily the minute queues start to form. The exchange has always known that the cancellation of a large tonnage of aluminium could create an overnight queue, preventing the timely delivery of metal held against its premium contracts. The new rules, on which members will soon be formally consulted, are...


Andrea Hotter

August 13, 2014

16:25 GMT

New York