(Corrects headline/first paragraph to clarifying that delay is to LORI, not QBRC)
London 30/09/2015 - The LME is extending its warehouse consultation by two weeks to seek feedback on amended proposals for its queue-based rent capping (QBRC) rule, it said on Wednesday.
As a result, the introduction of increased daily load-out (LORI) requirements for all warehouses with more than 150,000 tonnes of metal in one location is postponed to March next year instead of December 14 of this year as originally proposed.
The original consultation on LORI and QBRC ended on August 17. Following feedback, the LME is opening a further two-week consultation to allow for comments on proposed anti-abuse provisions, which would govern the application of QBRC from May 1 next year.
The QBRC rule forces a warehouse to halve the daily rent it charges after 30 days of waiting time and not to charge rent at all after 50 days.
Its anti-abusive measures would kick if 10,000 tonnes of metal were cancelled in one go or cumulatively in the same location by a single warrant holder, according to the new proposal.
And the QBRC clock that calculates when the 30 or 50 days have been reached would match the load-out schedule established between the warrant holder and the warehouse company, meaning that not all the cancelled metal would become rent free after 50 days.
The LME believes that these measures should ensure that no section of the market could take advantage of QBRC by cancelling large clips of metal to create load-out queues that would, in time, allow them to benefit from either lower rent or no rent at all, it said in a release.
"We certainly don't want QBRC to be a source of abuse," the LME said. "The LME provisionally believes that this represents a fair and appropriate balance between the rights of warehouse operators, and those of metal owners."
(Editing by Perrine Faye)