In November 2013, following a three-month market-wide consultation, the LME launched a warehouse reform package with twelve key elements.
All of these elements have now been implemented:
- Linked Load-In / Load-Out Rule (LILO) - including increased "decay factor" as of 1 August 2015
- Separate steel load-out rate
- Per-warehouse queue length report
- Commitments of traders report
- Creation of the Physical Market Committee
- Specific powers for the LME to address behaviour that creates or maintains queues (clause 9.3.4 – now clause 9.3.5 – of the Warehouse Agreement (PDF))
- Information barrier policy review
- Amendments to LME policies and procedures resulting from an independent logistical review
- Changes to the Warehousing Agreement following independent legal review
- Premium futures contracts for aluminium — launched on 23 November 2015
- LME powers to cap or stop rent in queues (queue-based rent capping or “QBRC”), implemented on 1 May 2016 alongside an increase in the minimum daily load-out rate (LORI), which was implemented on 1 March 2016
- LME powers to address structural solutions to high charges (charge-capping).
All the items outlined above are designed to address the need to ensure that the LME’s warehouse network fully serves the requirements of the global metals market.
Documents relating to LME warehouse reform can be found below. Should you have any questions, please contact us.
28-Sep-16 Charge-Capping Results Notice
| Ref | Title |
| 16/320 : A314 W098 | Decision Notice on amendments to the LME Warehouse Agreement in respect of charge-capping (PDF) |
14-Jul-16 announcements
| Ref | Title |
| 16/251 : A245 : W084 | Warehousing charges Discussion Paper - feedback and analysis (PDF) |
| 16/252 : A246 : W085 | Consultation on proposed amendments to the LME Warehouse Agreement in respect of charge-capping (PDF) |
| Explanatory presentation (PDF) |
|
| LME press release |
6-Apr-16 Discussion Paper on LME warehousing charges
| Ref | Title |
| 16/136 : A132 : W045 | Discussion Paper relating to LME warehousing charges (PDF) |
25-Nov-15 LORI and QBRC consultation results
30-Sep-15 Further consultation on QBRC - proposed anti-abuse provisions
| Ref | Title |
| 15/302 : A294 : W103 | Consultation on proposed amendments to the Policy on Approval and Operation of Warehouses Regarding LORI and QBRC (PDF) |
| Anti Abuse Mechanism Slides (PDF) |
1-Jul-15 announcements
22-May-15 Outstanding items from the consultation on amendments to the policies and procedures relating to the LME’s physical delivery network
| Ref | Title |
| 15/161 : A157 : W051 | Outstanding items from the consultation on amendments to the policies and procedures relating to the LME’s physical delivery network (PDF) |
27-Apr-15 Increase in the decay factor under LILO
| Ref | Title |
| 15/142 : A138 : W044 | Increase in decay factor under LILO (PDF) |
2-Mar-15 announcements
| Ref | Title |
| 15/068 : A068 : W021 | Update on LME physical network reform (PDF) Provides an overview of all progress so far on the twelve item reform package |
| 15/069 : W022 | Changes to the Warehouse Agreement (PDF) Outlines the LME’s response to all feedback received on its consultation on changes to the Warehouse Agreement, and confirms all rule amendments |
| 15/070 : A069 : W023 | Amendments to the Policies and Procedures relating to the LME’s physical delivery network (PDF) Outlines the LME’s response to all feedback received on its consultation on changes to the policies and procedures (including premium contracts, logistical review and separate load-out rate for aluminium alloys) and confirms all changes to be made |
| 15/071 : A070 : W024 | Consultation on proposed amendment to the decay factor in the Linked Load-In / Load-Out Rule (PDF) |
| 15/072 : A071 : W025 | Discussion Paper relating to possible reforms on warehousing policy and physical delivery network (PDF) |
| Media presentation (PDF) |
7-Nov-14 to 9-Feb-15 Consultations
| Ref | Title |
| 14/319 : W149 | Consultation on changes to the Warehouse Agreement (PDF) |
| 14/318 : A310 : W148 | Consultation on proposed amendments to the Policies and Procedures relating to the LME’s physical delivery network (PDF) |
LILO Re-consultation and Results Oct 14
| Ref | Title |
| 14/311 : A303 : W146 | Introduction of the Linked Load-In / Load-Out Rule (PDF) |
| 14/298 : A290 : W142 | Proposed implementation of the Linked Load-In / Load-Out Rule – Consultation with warehouses pursuant to warehouse agreement (PDF) |
Updates
| Ref | Title |
| 14/276 : A268 : W136 | Update on LME warehousing reform (PDF) |
| 14/121 : A117 : W056 | Update on Warehouse and Physical network Reforms (PDF) |
| February 2014 | LME Press Release |
| 14/039 : A037 : W024 | Announcement of Warehouse and Physical Network Reforms (PDF) |
Results of the Original Consultation 7 Nov 13
| Ref | Title |
| 14/311 :A303 : W146 | November 2013: Garry Jones, LME CEO, on warehouse reforms – video |
| November 2013 | LME Press Release |
| 13/326 : A312: W125 | Result of 2013 Warehouse Consultation (PDF) |
| 13/327 : W126 | Further consultation on proposed amendments to the LME warehouse agreement and policy regarding Approval of warehouses (PDF) |
| Public Report (PDF) | |
| Proposed revised LME Policy Regarding the Approval of Warehouses (PDF) |
Original Consultation Notice 1 Jul 13
| Ref | Title |
| 13/208 : A201 : W076 | Original Consultation Notice (1-Jul-13) (PDF) |
Other
| Ref | Title |
| FAQs | Frequently asked questions (PDF) |
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