New LME rules could hit warehouse willingness to take large clips

Warehouse companies are tackling the intricacies of what many say are the London Metal Exchange’s complicated, albeit necessary, rules to cut queues for aluminium – and make sure they never recur.

To reduce the current queues and prevent their deliberate formation in the future, the LME has, over the years, applied a minimum load-out rate, linked load-in and load-out rates and proposed capping rents on material that has been in a queue for delivery out for longer than 30 days.
Only this week, it said it was also considering moves to ensure that large warrant-holders would not be able to benefit from cancelling large volumes of metal simply to pay reduced or zero rent.
But as the rules governing warehouses that are licensed by the LME continue to change, warehouse executives and trading companies are also wondering what the consequences on the market will be in the future.

Of particular interest to them is how two factors will combine:...


October 07, 2015

16:10 GMT