An LME queue report published on February 11 stated there was a 118-day queue to withdraw aluminium at Istim warehouses in Port Klang
, Malaysia, at the end of January. This caused the market to believe LILO had been triggered.
The LILO rule measures all of the metal loaded into a warehouse over a three-month period. If there is a queue longer than 50 days, the warehouse is expected to deliver out more metal.
The recent 118-day queue originally built up after over 300,000 tonnes of aluminium was freshly canceled at LME warehouses in Port Klang during January.
Fastmarkets understands that the LME queue report calculates the queue at midnight on the last business day of the month – rather than during the working day.
“The queue report published and what is assessed for LILO are essentially different things and this is where the confusion comes,” a source said.