The London Metal Exchange opened a discussion on 9 March 2026 about prohibiting warehouse payments that continue after the original owner sells its metal.
The 2019 consultation described an agreement under which a warehouse passes an agreed share of its income to a metal owner after that owner has sold the metal. The duration depends on the agreement and applicable restrictions.
Questions for the market
- Should post-sale economic incentives be prohibited?
- Should any prohibition cover existing warrants or only future deposits?
The exchange highlighted risks to incoming metal and smaller warehouses unable to offer upfront payments. This was a request for feedback, not a ban.
Other warehouse proposals
Reuters reported that the wider review also considered replacing queue-related rent restrictions with a daily load-out requirement of 1.5% of warranted metal. Under the existing arrangement described in the report, rent falls to zero when required load-out has not occurred within 80 days.
The review also questioned whether aluminium must remain indoors and whether approved warehouses should be located in areas of net consumption. Reuters had reported plans for a storage-rule consultation in early 2025, amid efforts to address warehouse congestion. These were issues under examination, not a completed replacement of the warehouse framework.
The earlier decision on rent-sharing
In its November 2019 feedback analysis, the exchange retained authority to introduce termination on warrant cancellation or a subsequent owner's written request through a separate notice, with at least 30 days' warning. It did not accept demands to activate that mechanism immediately.
The exchange also rejected a proposed restriction on incentives for metal moved between warehouses within the same location. It cited owners' freedom to move metal and difficulties tracking those movements. It reaffirmed that warehouses could not disclose a subsequent owner's identity to a party receiving post-sale payments. Those findings explain the earlier policy choices, not the outcome of the new discussion.