LME progresses warehouse and physical market enhancements and consults on streamlined brand listing.
- LME proposes faster listing process for new metal brands
- Consults on indelible marking for aluminium, zinc and lead, and outside storage of primary aluminium in Hong Kong
- Range of proposals for warehouses now confirmed including Certificates of Analysis for copper and continuation of charge cap on Rents and Free on Truck (FOT) rate
The London Metal Exchange (LME) has today published a response to its combined consultation and discussion paper, issued in March, that considered enhancements to its physical market infrastructure. In summary:
- The LME will take forward all of the proposals in the consultation section of the March document.
- Based on feedback to the discussion paper section of the document, the LME will take forward two of those items, together with a new approach to safely expedite brand listings. The specific proposed rules associated with those three topics are contained in a further consultation paper, which the LME has published today.
The proposals reflect the LME’s goals of keeping pace with market developments, meeting the needs of users and improving operational transparency and efficiency.
Georgina Hallett, LME Chief Sustainability Officer and Head of Physical Markets, said: “We are grateful for all the responses to the consultation and the backing that we received for these important changes. They will enhance the day-to-day functioning of our warehouse network and brands list and will enable further digitalisation which will drive efficiency and transparency, particularly for copper.
“Our new consultation offers greater opportunities for the physical market with an expedited route to listing brands on the LME, while still maintaining the industry leading prerequisites that make LME registered metal the global benchmark.”
Today’s consultation paper
The proposals in the consultation are:
- Reducing the minimum period (currently 12 months), for which a producer must have been in production before their brand application can be considered for listing. Currently the process is in two stages: Stage One, the submission and review of the application and Stage Two, the testing and approval to list the brand. For copper, it is proposed this would be amended to a minimum of six months of production before submission of an application, and production would need to reach 12 months before the start of Stage Two. For aluminium, lead, zinc, nickel and tin, it is proposed production would be a minimum of six months with no further time requirement before progressing to Stage Two. Cobalt would need to reach six months before application and 12 months of production before listing, under the proposal. Further efficiencies to the sampling and assaying process, again without compromising standards, are also proposed.
- Permitting primary aluminium to be stored outside, but in Hong Kong only. The LME is aware of growing interest in arbitrage trading in aluminium between the Chinese Mainland and the LME’s global warehouse network. Hong Kong would be an attractive geographical location for this arbitrage – but has not yet been able to play this role, given limited indoor space in Hong Kong and the fact that aluminium, as a lighter metal, takes more storage space per metric tonne than lead or zinc. These factors, combined with the low risk of ice formation on metal stored outside in Hong Kong, mean that the LME considers it appropriate to propose this approach.
- Requiring indelible markings of the Production Cast Reference (PCR) for new brands and shapes of primary aluminium, lead and zinc brands, are also proposed (in addition to copper, which had a similar proposal in the March consultation). Many producers already use indelible PCRs and this change would eliminate the issues seen when labels are damaged or detached.
Responses to the consultation paper should be made by 11 September 2026.
Outcome of the March Consultation
All of the changes consulted on in the consultation section of the paper issued in March will be implemented:
- The extension of the requirement for the auditing of warehouse companies’ procedures around confidentiality to cover all warehouse companies, will take effect from 1 January 2027.
- The current rent and Free on Truck (FOT) charge cap will be extended to cover the period 2027-2032.
- Listing of FOT charge caps will be currency-standardised, although the option to pay in local currency will remain.
- Re-warranting charges will be capped at US$10 per metric tonne and warehouse companies will need to give 90 days’ notice of increases to ancillary fees.
- Copper will require a Certificate of Analysis (CoA), aligning it with other LME-listed metals, as well as an indelibly marked PCR. This will improve traceability for LME copper and support market digitalisation. The changes will be phased in, so that by 1 January 2030, metal will only be eligible for warranting (including re-warranting) where it has an electronic CoA and an indelible PCR marking. In response to consultation feedback, more time is being provided for the implementation of indelible marking, which can also be written manually, if producers do not wish to invest in automated equipment.
- Warehouse companies will be required to submit the data for metal reports at the time of warrant issuance (rather than on request or cancellation).
Other Discussion Paper topics
Following consideration of the responses to the other topics in the March discussion paper (including queue-based rent capping and the continuation of evergreen rent deals), the LME has concluded that it will not proceed with these proposals (other than those in today’s consultation paper), but several will be kept under review.
~Ends~Notes to editors
- The combined consultation and discussion paper published in March can be found here
- The Feedback Analysis and Decision Notice can be found here
- The consultation paper, published today, can be found here (PDF)
Contact us
For further information or to speak to an LME spokesperson, please contact:
Miriam Heywood
+44 (0)7554 667 846
Joseph Eyre
+44 (0)7740 413 234