"LME approves changes to warehousing policy"

 From HedgeWeek:

The board of the London Metal Exchange (LME) has approved the proposed changes to its warehousing policy designed to cut queues at warehouses, following a three-month consultation with the global metals industry.

The LME has closely engaged with the FCA to ensure that the changes are consistent with the LME's regulatory requirements.

"As the world's leading base metals exchange, the LME has a duty to the entire metals community to run a fair and orderly market. We had a responsibility to examine concerns raised about lengthy warehousing queues, as these pose a range of issues in terms of price discovery and price convergence as well as the use of the market for effective hedging," says Garry Jones, chief executive of the LME.

"The LME wishes to thank all the individual companies and industry groups who made time to respond to the proposal. While the feedback we received over the three-month consultation period was varied and at times polarised, we believe that the amended proposal is, on balance, the best solution for all market users.

"Having carried out a rigorous and in-depth market engagement programme involving over 70 meetings and more than 30 written responses we now call on all market participants to move forward under these new rules, which we believe best balance the needs of all LME stakeholders."

Some modifications have been made to the proposal in accordance with market feedback. The initial proposal targeted warehouses with queues of more than 100 days, but as a result of the consultation the threshold has been reduced to 50 days, allowing the LME to better deliver a market of last resort to physical metals users....MORE