The LME, where investors buy and sell more than 80 percent of industrial-metals futures, last year doubled the so-called minimum load-out rate for warehouse companies storing more than 900,000 tons at a single site. This year it introduced an extra delivery requirement for storage companies where bookings exceed 30,000 tons of a single metal, as well as separate minimum daily deliveries of tin and nickel.
“While these initiatives have increased access to lower- volume metals, it is clear from stock data that they have failed to resolve the persistently long waiting times for certain metals in particular locations,” the LME said today.
Buyers can still get metal from warehouses and there is no “fundamental problem” with the market, Li said on his blog, adding that there’s no need for a “bazooka” to tackle the issue. The LME board has yet to form a view on whether warehousing rules need to be changed, he said.
Goldman Sachs Group Inc.’s Metro International Trade Services LLC operates the most warehouses in Detroit, while Pacorini Metals, owned by Glencore Xstrata Plc, dominates in Vlissingen, according to the LME website. Pacorini also has the most warehouses in Johor and New Orleans, while Trafigura Beheer BV’s NEMS controls most sites in Antwerp.