Key questions—and answers—on LME warehouse queues
Oct 03, 2012 | 12:34 PM
| Andrea Hotter
DETROIT As the London Metal Exchange continues to review regulations governing warehousing, AMM sister publication Metal Bulletin outlines load-out rates and warehouse queues.
How much metal can be moved out of LME warehouses in a day?
That is the million-dollar question, and the answers vary depending on who is being asked.
Banks and merchants seeking instant access to metal in warehouses allege that warehouse firms are deliberately loading out at the minimum rate, and could do more.
Aluminum consumer Novelis Inc. has called for the LME to triple the current rate at large-tonnage locations to 9,000 tonnes per day after it already doubled it to 3,000 tonnes per day in April this year.
Warehouse firms say a rate higher than 3,000 tonnes would be physically impossible, as a truck can carry only 20 tonnes of aluminum, meaning it takes 150 trucks to deliver out the minimum amount each day. It can take 20 minutes for one forklift driver to load a truck, they say, provided all the metal is in one location; if it was originally delivered in at different times, then it could be distributed across any of the sheds in the location. And more often than not, forklift drivers have to shift stacks of metal before they can get to the single piece of metal to which a customer warrant correspondsit is not a case of last-in, first-out. ....
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