Finance
LME plans permanent rules restricting large-position holders
Published by Global Banking and Finance Review
Posted on October 30, 2025
Global Banking and Finance Review
Company
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Published by Global Banking and Finance Review
Posted on October 30, 2025
By Eric Onstad
LONDON (Reuters) -The London Metal Exchange (LME) said on Thursday it plans to set permanent rules that impose restrictions on members with a large positions in nearby contracts amid low inventory levels.
The world's oldest and largest market for industrial metals, which is owned by Hong Kong Exchanges and Clearing Ltd., imposed temporary restrictions in June after premiums for nearby copper contracts jumped.
The LME said these were introduced in response to the low-stock environment combined with large positions held in nearby dates, which had prompted the LME's Special Committee to direct market participants to reduce large on-exchange positions.
Recently, premiums for nearby zinc have soared to record levels after inventories slid by about 85% so far this year.
MAINTAIN ORDERLY MARKETS
"The LME believes that having a permanent rule that applies to the whole market to deal with market participants with significant positions in nearby prompt dates is the most appropriate measure to maintain orderly markets," it said.
The LME said in June that actions had been taken to head off the development of a potential "corner" on the market or an "undesirable situation".
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, the LME said in a statement on Thursday.
The new rule also expands existing restrictions on so-called "tom-next" positions that are closer to delivery, it added.
In zinc, the premium for the cash contract over the three-month forward hit a record of $339 a metric ton last week, but had dropped to $133 on Wednesday.
The LME said a consultation would be open until November 21.
(Reporting by Eric Onstad; Editing by Bernadette Baum and Alexander Smith)