Published by Global Banking & Finance Review®
Posted on June 20, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe LME has imposed new restrictions on large position holders due to low stocks and high premiums, aiming to prevent market manipulation.
LONDON (Reuters) -The London Metal Exchange has imposed new restrictions on holders of large positions in nearby contracts amid low inventory levels, it said on Friday.
LME took action after premiums for nearby copper contracts jumped to their highest levels since October 2022.
The exchange, the world's oldest and largest market for industrial metals, said it has been monitoring large positions in recent months and in some cases had to take action.
"At times the LME’s Special Committee has directed market participants to take a number of actions to reduce large on-exchange positions relative to prevailing stock levels," the LME said in a statement.
"Given the ongoing low stock environment, the Special Committee now feels it appropriate to introduce ... transparent and generally applicable set of requirements."
The action was taken to head off the development of a potential "corner" on the market or an "undesirable situation", it added.
The new rule expands the LME's existing restrictions on so-called "tom-next" positions that are closer to delivery, it added.
The restriction requires holders of long positions which are greater than the total stocks levels to lend back to the market at a zero premium.
In copper, the premium for the cash contract over the three-month forward is trading at $180 a ton from a $3 premium only a month ago.
LME data shows there is one company holding a dominant position of more than 90% copper warrants and cash contracts and two companies holding 50%-79%.
Warrants are title documents conferring ownership of metal.
Copper stocks in LME registered warehouses at 99,200 tons have dropped more than 60% since the middle of February and are at their lowest since August 2023.
The LME is owned by Hong Kong Exchanges and Clearing Ltd.
(Reporting by Eric Onstad; Editing by Chris Reese and Diane Craft)
The LME imposed new restrictions after premiums for nearby copper contracts surged to their highest levels since October 2022, amid low inventory levels.
Holders of long positions greater than total stock levels are required to lend back to the market at a zero premium.
Copper stocks in LME registered warehouses have decreased by more than 60% since mid-February, reaching their lowest levels since August 2023.
The new rules aim to prevent the development of a market 'corner' or other undesirable situations due to low stock levels.
The LME is owned by Hong Kong Exchanges and Clearing Ltd.
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