Recommendations for the requirement at least 60 tonnes of nickel and/or tin to be delivered out of London Metal Exchange warehouses daily do not go far enough, tin market participants told Metal Bulletin.
The LME has accepted the recommendations in principle
, in response to concerns over queues for metal, but traders have said the proposed new rates will not go all the way to solving the problem.
“I think that the LME’s proposal, so far, on minimum load rates for tin, is far too small,” one trader said.
“[It could] help to exacerbate further the bottlenecks for tin in Johor, and possibly elsewhere in the future.”
The additional load-out rates could be a positive step, a sales agent said, but added that he believes they should apply to tin and nickel separately.
“I feel these proposals from the LME on additional load-out rates for tin are a move in the right direction so that it doesn’t get caught up in the warehouse wars for aluminium, zinc, and so on,” he said.
“However, I don’t see why we have to share the 60 tonnes with another metal,” the sales agent added.
Final approval and implementation of the amended load-out policy will be subject to consultation with warehousing companies under LME procedures.
Changes already implemented include a minimum load-out rate for all base metals.
The requirement for additional tonnages to be loaded out would come into force if a warehouse company had reached its minimum daily load out rate, and had not delivered out 60 tonnes of tin and/or nickel.
The LME has said that it recognises it would be “inappropriate” to have a completely separate load-out schedule for tin and nickel.
It has also been proposed that the LME keeps the effectiveness of any changes to load-out rates for the two metals under constant review.
Warehouse companies have been asked in a separate notice from the LME to comment on the proposals by June 15.
No changes will be made until 90 days after the results of this consultation are published.
European tin premiums, meanwhile, have remained flat for another week, at $600-650 per tonne for 99.9% material, and $400-550 per tonne for 99.85% material.