Glencore moved to complete the formalities and create a queue of more than 50 days before the end of January, which would have activated the LME’s load-in, load-out rules for warehousing.
Metal entering the LME’s global warehouse storage network is issued with a title document called a warrant. In order to take delivery of metal from the network, buyers need to cancel the warrants – earmarking it for delivery.To get the metal out quickly, Glencore moved to complete the formalities and create a queue of more than 50 days before the end of January, which would have activated the LME’s load-in, load-out rules for warehousing, the sources said.
But the rules were not triggered in this case because ISTIM said there was no queue at its warehouses in Port Klang at the close of business on Jan 31, sources said. “The LME’s warehousing rulebook is a labyrinth and both Glencore and ISTIM are inferring different things. We think the difference comes from where they think the queue starts,” an aluminium trading source said.