NewsPrimary ALThe LME queues are reducing across all registered warehouses
18 DECEMBER 2014<a href= http://www.reuters.com/article/2014/12/16/us-lme-warehousing-ahome-idUSKBN0JU18X20141216 ' target='_blank'> Reuters </a>

The LME queues are reducing across all registered warehouses

Edited by : AL CIRCLE
2 min read
The LME queues are reducing across all registered warehouses
The backlog to remove aluminum from Detroit, the most acutely impacted location, shrank by 30 days to 641 days, while the wait to remove other metals stuck behind the wall of aluminum fell from 111 to 93 days.

The reduction in waiting times was even sharper at the Dutch port of Vlissingen, a drop from 637 to 555 days, according to the LME's latest monthly report.

All good news, it appears, for the LME, which has been lambasted by industrial users for its dysfunctional physical delivery system and its disputed part in fracturing the aluminum market's pricing model.

True, the problem can hardly be described as fixed given you'd still have to wait well over a year to get aluminum out of either Detroit or Vlissingen, but at least things are moving in the right direction even before the exchange's new rules linking load-in to load-out rates (LILO) kick in from February.

However, the simple metrics of queue length mask a redrawing of the battle-lines in the LME's ongoing campaign against its warehousing companies.

One in particular, Pacorini, the metal logistics arm of Glencore, is steadily increasing its dominance of the global LME storage system.

Its share of LME-registered metal, both on-warrant and awaiting departure, has grown from just under 50 percent in April to 54 percent in November.

But Metro, the LME warehousing operator owned by Goldman, has been out of the queue-creation game for many months now. Its Detroit operations have received just 1,725 tonnes of aluminum since April. A total 537,000 tonnes have been loaded out over the same period.

Goldman Sachs said in June it was voluntarily complying with the LME's LILO rule, even while its enactment was held up in the UK legal system. Such good behavior may also have something to do with ensuring operational stability during a sales process which is thought to be entering its final stages.

In terms of LME load-out queues, both current and potentially future, it looks increasingly as if the exchange is going to have to do battle with Pacorini and its physical markets power-house owner Glencore.

Metro, or at least Metro under Goldman Sachs ownership, is in wind-down mode. Its storage share of LME stocks has been declining steadily from almost 25 percent in April to 18 percent at the end of November.

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