Owners of warehouses, in particular larger companies but also several medium-sized firms, see it a little differently.
To the latter grouping, the LME proposals are not the bazooka that was threatened by the exchange’s owner Hong Kong Exchanges & Clearing, but an atomic bomb.
These warehouses don’t particularly welcome the lower threshold at which scaled-up load-out rates start as well as the higher minimum delivery levels.
But their bigger issue of complaint is the proposal to halve rent at warehouse locations where queues exceed 30 calendar days and abolish it entirely at sites where wait-times exceed 50 calendar days.
Combined with the lower threshold of 150,000 tonnes required for deliveries of 2,000 tonnes per day – previously 300,000 tonnes of stock required for deliveries of this level – the effect of the proposals is clear.
In order to earn full rent, a warehouse cannot have a queue above 30 calendar...