Warehousing company Worldwide Warehouse Solutions (WWS) will be removed from the LME’s metal warehousing network and all warranted metal there will be suspended, with the exchange citing concerns the company would “likely" become insolvent.
Metal has already moved out of WWS warehouses in Singapore, the exchange said, but there have been difficulties in obtaining it due to unpaid WWS debts.
"In the last few days, the LME understands that landlord warehouse companies of WWS have refused to release LME-warranted metal because of debts owed to them. This could affect the orderly operation of the market and the ability of warrant holders to take prompt delivery of metal," the LME said.
The LME is taking WWS warehouses in New Orleans, St Louis, Antwerp and Vlissingen out of its warehousing network, it said in a notice today.
“It has become clear to the LME that WWS is in serious financial difficulty and that there are a number of outstanding debts owed by WWS to third-party creditors that have not been settled in accordance with their payment terms,” the notice said.
“WWS also owes outstanding debts to the LME that have not been settled in accordance with their payment terms,” it added.
The decision follows a spate of warehouse closures in WWS’ Detroit and Johor locations over the last month amid plummeting stocks and liquidity issues, which Metal Bulletin exclusively reported
Following the delisting, the LME said metal in WWS locations would be suspended from warranting. Current exchange-warranted metal inventories being warehoused by WWS total:
New Orleans: 92 warrants, 8 cancelled warrants
St Louis: 1 warrant, 33 cancelled warrant
Antwerp: 59 warrants
Vlissingen: 2 warrants
A spokesperson from WWS was unavailable for comment when contacted by Metal Bulletin.