HOTTER ON METALS: Getting tough on LME warehouse rent

The London Metal Exchange has for years said it believed European Commission competition law prevented it from setting, capping, or influencing rents to store metal and FoT (free on truck) rates.

Not any longer, it would seem. The exchange has spelled out proposals for a new regime to tackle the remaining queues at its approved network of warehouses and to ensure its warehousing system and LME market place remains credible. Those proposals, subject to a six week consultation ending mid-August, include lowering the threshold at which scaled-up load-out rates start and increasing minimum delivery levels. They also include plans that would see rent halved at locations where queues exceeded 30 calendar days and abolished entirely at sites where wait-times were over 50 calendar days. Put rent, FoT and other charges up to compensate for the loss of revenue, and the LME might cap those charges, it also said. The apparent change of heart by the LME over getting tough on rent seems hard to fathom in light of its past competition authority fears, until the language of the consultation documents is more...


Andrea Hotter

July 02, 2015

01:27 GMT

New York