London 05/02/2016 - The LME has offered a 'one-off' two-week window from February 19 for listed warehouse operators to revise warehouse rents and FOTs lower, it said.
The LME publicly challenged the rationale behind the 'out of line' increases proposed for 2016-2017. It has provided this window due to an "exceptional combination of circumstances", it stressed in a release on Friday, and it should not be seen as a regular element of the charge-setting process in future years.
"Such an exceptional re-opening of the submission window is not envisaged under the warehouse agreement. However, the LME has discussed this with its licensed warehouse operators, who have not objected to this action," it added.
The LME will publish no later than March 1 a revised 2016-17 rent and FOT schedule to the market, which will represent the final warehouse charges for that period. The exchange will not accept any increases in rates and FOT rates for the period, it said.
FastMarkets reported last week that the exchange would provide an opportunity to lower rents following an extraordinary meeting with warehouse operators.
At 10 percent for rents and 12 percent for FOTs, the stockweighted average increases were significantly higher than in the previous two cycles.
Metro stood out, proposing increases of 33 percent in rents and 39 percent in FOTs, followed by Istim - the Whelan family business - with increases of 22-33 percent and Noble-owned Worldwide Warehouse Solutions (WWS) with rents up by nearly 10 percent.
(Additional reporting by Perrine Faye, editing by Mark Shaw)