Warehouses approved to store metal by the London Metal Exchange will raise rents amd removal charges at “materially lower” rates than the previous year.
Rents will increase an average of 3 percent in the year started April 1, compared with 7 percent a year earlier, and rates to remove metal from warehouses, or Free-on-Truck charges, will climb an average of 2 percent after an 8 percent jump a year earlier, the LME said in a notice to members today.
The LME announced changes to warehouse storage rules on Nov. 7 that will take effect in April, after users complained about long waits to get metal from some locations. The LME will require warehouse companies where wait times exceed 50 days at a location to deliver more metal than they can take in.
Rents to store aluminum in Vlissingen, Netherlands, the biggest repository for LME aluminum, will go up to as much as 49 cents per metric ton per day, at Glencore Xstrata Plc’s Pacorini Metals, which charges 48 cents currently, according to the LME notices. The charges in Detroit will go up to as much as 51 cents a ton, at Goldman Sachs Group Inc.’s Metro International Trade Services LLC, which charges 48 cents now.
“The LME is grateful to those warehouse operators that respected the call for restraint in setting their charges for the forthcoming period,” the LME said in the notice today. “The stock-weighted rate of increase for both rents and FoTs is materially lower than in the previous year.”
Detroit FoT charges will be unchanged at $39.95 a ton at Metro for next year, according to the notice. Worldwide Warehouse Solutions LLC, owned by Noble Group, is lowering the FoTs in Detroit to $38.55 from $39.85 a ton, according to the notices. Pacorini is raising its FoT in Vlissingen to 28.75 euros ($39.70) a ton from 27.95 euros a ton, the notices show.