As a market of “last resort”, industry can use the LME’s delivery option to sell excess stock in times of over supply and as a source of material in times of extreme shortage.

In reality, physical delivery occurs in a very small percentage of cases on the LME as most organisations use the Exchange for hedging purposes. However, the small percentage which does result in delivery plays a vital role in creating price convergence.

Warehousing

To support this mechanism the Exchange approves and licenses a network of warehouses and storage facilities around the world. Warehouse companies must meet strict criteria before they are approved for the handling of metals, steel and plastics.

• Download a list of authorised warehouses and storage facilities
• Learn more about LME’s application process for new warehouse and warehouse operators

Rent & FOT

Warrant holders are responsible for payment for storage of material in LME approved warehouses and storage facilities.

• Review the maximum rental charges and FOT rates provided by warehouse companies.

In 2007 an independent study investigated the implications of changing standard LME contract terms for metal delivery from an "in warehouse" basis to a "free on truck" (FOT) basis.

• Read the conclusions and recommendations

Daily Stock Reporting