Glencore has lodged an official complaint to the LME to revert the situation and activate LILO as of January 31, while Istim is firmly arguing against it, claiming that the queue only became effective on February 1, Fastmarkets understands
Glencore and Istim declined to comment.
The LME also declined to comment due to confidentiality obligations, but the complaints procedure on the exchange’s website states that an investigation could take up to three months to complete.
Sources close to Glencore told Fastmarkets that legal action could follow should the official complaint not rule in their favor.
Other warehouse companies are also eagerly awaiting the LME’s ruling to see if LILO was unfairly implemented in the past, Fastmarkets has learned.
A matter of timing
A few hours lie at the heart of the dispute: 48 hours to be exact.
According to LME rules, LILO is triggered when a warehouse company has a shipping queue exceeding 50 calendar days at...