London 13/01/2016 - The London Metal Exchange (LME) saw more deliveries out than in last year on average, with outflows especially evident in aluminium and zinc.
This was due to tougher exchange rules on load-out requirements and punitive measures for warehouses with queues, an LME notice showed on Wednesday.
Some 2.03 million tonnes of primary aluminium exited listed-warehouses in 2015 compared with 716,300 tonnes delivered in, leaving the exchange with just 2.89 million tonnes of the metal at the end of the year.
The main outflows were in Detroit and Vlissingen, where Metro and Pacorini Metals respectively had long delivery queues, while Rotterdam also saw three times more deliveries out than in.
The exchange also saw 587,650 tonnes of zinc moved out last year compared with 359,525 tonnes loaded in, finishing the year with 462,700 tonnes of the metal. The main exit port was New Orleans, where Pacorini Metals, followed by Istim, had a queue.
The moves are a direct result of the LME's warehouse reform aimed at shortening queues, targetting warehouse companies with delivery times exceeding 50 calendar days.
Some rules came into effect last year including the linked load-in/load-out (LILO) rates, while others like load out rate increase (LORI) and the controversial queue based rent caps (QBRC) will come into play later this year.
The stricter LME rules on load-out rates and queue prevention have pushed a great deal of metal away from the exchange and into cheaper and more flexible non-LME storage.
The LME, however, managed to attract more copper stocks last year, with 503,675 tonnes coming into listed-warehouses, compared with 444,900 tonnes loaded out.
It also slightly increased its nickel stocks, with 325,566 tonnes loaded in and 299,124 tonnes loaded out - the metal has been very popular with Chinese traders entering rent deals and financing agreements in Asian locations last year.
However, more lead stocks left the exchange than went in - 300,550 tonnes loaded out against 270,225 tonnes loaded in - and tin stocks also declined, with 17,420 tonnes delivered out against 11,425 tonnes delivered in. For the latter metal, however, deliveries may reflect increased sourcing by consumers and traders, amid a drop in exports from key supplier Indonesia.
(Editing by Martin Hayes)