London 26/01/2016 - The London Metal Exchange (LME) has scheduled an emergency warehouse committee meeting for this Friday to offer operators one last chance to reduce their rent and free-on-truck (FOT) charges before these go live on April 1, FastMarkets understands.
"They are going to propose a window for warehouse operators to reduce their rents and FOT levels," a well-informed source said. "It's a one-off [proposal] because they feel that rates [that have already been submitted] are not reflective of the market."
The meeting was confirmed by multiples sources. The LME declined to comment.
LME-listed warehouse companies submitted late in December increases for rents and FOTs for the year starting on April 1, 2016. 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 with its proposed 33-percent increase.
The LME, which has no control over warehouse fees, said on December 30 that it was reviewing what it regarded as "out-of-line" increases.
(Editing by Mark Shaw)