Published by Global Banking & Finance Review®
Posted on March 9, 2026
3 min readLast updated: April 1, 2026
Add as preferred source on GoogleThe LME is proposing to replace its existing 80‑day rent caps with a fixed daily load‑out requirement—loading out 1.5% of warehoused metal daily—and is also seeking feedback on ending “evergreen” rent‑sharing arrangements and reassessing storage conditions.
By Tom Daly and Pratima Desai
March 9 (Reuters) - The London Metal Exchange said on Monday that existing caps on rent charged by its network of warehouses could be replaced with a fixed daily load-out rate.
As part of a consultation on proposed enhancements to its physical market infrastructure, the LME said it may introduce a requirement to load out 1.5% of metal on warrant - a title document conferring ownership - on a daily basis.
Under the current system, rent is lowered to zero if a warehouse fails to load out the required metal within 80 days.
The consultation, open for responses until May 8, will consider exempting cancellations of over 10,000 metric tons from the 1.5% requirement to ensure larger warehouses are not disincentivized from accepting more metal, the exchange said. Warrants are cancelled when the owner is planning to withdraw metal from the LME system.
Reuters reported in early 2025 that the LME planned to launch a consultation on revamping its storage rules to tackle warehouse gridlock.
On Monday, the exchange said it was also proposing freezing rent and free-on-truck charge cap rates for a further five years from April 2027 to March 2032. Free-on-truck, or FOT, charges are fees levied by LME warehouses to prepare metal for transport on a truck.
Rent capping has failed to stop queues from forming when large amounts of metal are cancelled for delivery.
AUDITING REQUIREMENTS
The LME also said it was interested in views on whether so-called "evergreen" rent deals should be ended. An evergreen rent deal entitles a company that places metal on warrant in an LME warehouse to a share of the rent collected from the new metal owner.
Meanwhile, the consultation will also cover a proposal to extend auditing requirements for warehouse companies' confidentiality procedures to all warehouse operators. Current requirements apply only to those warehouse companies that have close links to an LME trading entity.
"The LME believes that requiring all warehouse companies to audit their information barriers would ensure good practice in relation to confidentiality of stock information," the exchange said.
The consultation will also reassess the need for aluminium to be stored indoors and consider introducing a certificate of analysis requirement for copper, the only metal which currently does not need one when it is put on warrant.
(Reporting by Tom Daly and Pratima Desai; Editing by Diti Pujara and Jonathan Ananda)
The LME is considering replacing current rent caps with a fixed daily load-out rate requiring warehouses to move out 1.5% of metal on warrant per day.
The LME aims to address warehouse gridlock and enhance physical market infrastructure through a consultation on new storage rules.
An evergreen rent deal allows entities storing metal in LME warehouses to receive a share of the rent collected from new metal owners.
The consultation will reassess if aluminium should continue to be stored indoors in LME warehouses.
Yes, the LME is seeking views on whether warehouses should be located in areas of net consumption.
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