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LME warehouse reform

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, or are due to be implemented shortly:

  1. Linked Load-In / Load-Out Rule (LILO) - including increased "decay factor" as of 1 August 2015
  2. Separate steel load-out rate
  3. Per-warehouse queue length report 
  4. Commitments of traders report 
  5. Creation of the Physical Market Committee
  6. 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 )
  7. Information barrier policy review
  8. Amendments to LME policies and procedures resulting from an independent logistical review 
  9. Changes to the Warehousing Agreement following independent legal review
  10. Premium futures contracts for aluminium — launched on 23 November 2015
  11. 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
  12. LME powers to address structural solutions to high charges — charge-capping — to be implemented on 28 December 2016 following a market-wide consultation which closed on 19 August 2016

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 at

28-Sep-16 Charge-Capping Results Notice

6-Apr-16 Discussion Paper on LME warehousing charges

Ref Title
16/136 : A132 : W045 Discussion Paper relating to LME warehousing charges 

30-Sep-15 Further consultation on QBRC - proposed anti-abuse provisions

22-May-15 Outstanding items from the consultation on amendments to the policies and procedures relating to the LME’s physical delivery network

27-Apr-15 Increase in the decay factor under LILO

15/142 : A138 : W044 Increase in decay factor under LILO

2-Mar-15 announcements

15/068 : A068 : W021 Update on LME physical network reform: which provides an overview of all progress so far on the twelve item reform package
15/069 : W022 Changes to the Warehouse Agreement: outlining the LME’s response to all feedback received on its consultation on changes to the Warehouse Agreement, and confirming all rule amendments
15/070 : A069 : W023 Amendments to the Policies and Procedures relating to the LME’s physical delivery network: outlining 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 confirming 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
15/072 : A071 : W025 Discussion Paper relating to possible reforms on warehousing policy and physical delivery network
   Media presentation


Original Consultation Notice 1 Jul 13

13/208 : A201 : W076 Original Consultation Notice (1-Jul-13)