LME announced the physical market optimization plan market consultation results and initiated consultations on streamlining brand registration requirements, etc.
The Zhitong Finance App learned that on August 7, the London Metal Exchange (LME) published an article stating that in March of this year, LME released a consultation and discussion document to discuss a number of potential optimization measures for physical market operations, especially the warehousing network. Based on market feedback, LME decided to revise the delivery site approval policy, warehouse agreement and LME rules. Among them, the revision of the warehouse agreement will take effect on October 30, 2026.
Key changes include:
1. Warehouses increase information isolation requirements
According to exchange regulations, each related warehouse (related warehouse) must maintain effective information isolation measures between its related trading companies, and non-related warehouses (Non-related warehouses) must also maintain an effective information isolation mechanism. Each related warehouse and unrelated warehouse should hire a certified public accounting firm (its selection and employment must be approved by the exchange) to ensure that the information isolation mechanism established by it complies with the exchange standards.
LME will issue a separate notice to the market setting out the requirements for “unaffiliated warehouses” to handle price-sensitive information.
Unrelated warehouses must establish information quarantine measures before January 1, 2027, and submit a report on compliance with the information quarantine measures issued by the practitioner (practitioner) to LME by April 30, 2028.
2. Warehouse rent and FOT limits
Current rent and FOT caps will be maintained until the first quarter of 2032
3. Maximum fee for re-registering a warehouse receipt (re-invoicing)
The upper limit will be set at USD 10/mt, and will be announced in October 2026 along with other annual fees.
4. About the limit and notice period for some storage fee increases
LME requires warehouse companies to notify LME at least 3 months in advance and separately notify the market when increasing fees by 20% or more for the following services: free on rail delivery (free on rail), free in container yard delivery (free in container yard), ship class/time window rebooking service (slot rescheduling services).
LME requires that if the fee for one of the above services (one-time or cumulative over 12 months) has been raised by 20% or more, the fee for that service shall not be raised again within the next 12 months.
5. Copper - Requirements for introducing quality inspection reports and permanent labeling
After reviewing the feedback from the “Consultation Paper”, LME decided to continue to advance the following requirements: all LME-listed copper (LME-listed copper) must be accompanied by a Quality Inspection Report (CoA); all LME registered copper must be permanently marked with a Production Cast Reference (PCR) on the physical metal.
LME believes that the introduction of copper CoA and permanent PCR labeling requirements will help: improve the data integrity and recognizability of LME registered copper, support the digital management and subsequent traceability of the supply chain; support the continuous digital development of the physical market, thereby improving market efficiency and transparency; and maintain higher consistency with other LME metals that require CoA to register warehouse receipts.
In view of market feedback, particularly concerns about the implementation method and timing of the copper permanent labeling requirement, LME decided to extend the implementation period of this requirement.
January 1, 2028 will still be the date for the official implementation of the copper-CoA system. However, for PCR permanent labeling requirements, LME will set a two-year transition period.
For copper produced before January 1, 2028, if there is a paper quality inspection report (Paper CoA) that can be converted to a “Basic Electronic Quality Inspection Report” (Basic eCOA) or already holds an “Enhanced Electronic Quality Inspection Report”, or Enhanced eCOA, it will be eligible for warehouse receipt registration from January 1, 2028.
Copper produced after January 1, 2028 must be equipped with an enhanced version of eCOA generated through LMEPassport, and must be able to recognize verifiable PCR: Production Label (Production Label); or Acceptable Permanent Marking (Acceptable Indelible Marking)
Copper produced after January 1, 2030 must have a permanent PCR mark that meets the requirements before it can be registered as a warehouse receipt.
As of January 1, 2030, metals that have been registered as warehouse receipts without a permanent PCR mark or CoA will be allowed to continue to maintain their warehouse receipt status until the warehouse receipt is cancelled.
6. Automatically upload metal reports
A Metal Report (Metal Report) is a report that an LME registered warehouse can request from a warehouse receipt holder. The report details the physical metal information corresponding to the warehouse receipt, including characteristics such as chemical composition, LME brand (Brand), cast number (Cast Number), and other relevant supporting data.
LME will require warehouses to upload metal reports to LMEpassport via an API or Excel file when generating a metal warehouse receipt. By automating this process, warehouse receipt holders will be able to directly enter the warehouse receipt number (Warehouse ID) in LMEPassport and identify the physical metal corresponding to their warehouse receipt without requesting relevant information from the warehouse. The system will automatically link relevant metal data in the back office and display it to users through a unified interface.
This function will enable users to more easily obtain information on the metals they hold, improve the transparency and trustworthiness of registered warehouse receipts and metal holdings, reduce administrative processing workload, and bring users a faster and more efficient user experience.
The relevant requirements will take effect on December 1, 2026.
Meanwhile, LME announced that it will solicit market comments on the following three aspects. The deadline for feedback is September 11, 2026:
1. Whether to allow raw aluminum to be stored outdoors (subject to discussion in Hong Kong, China)
2. Whether to add permanent labeling requirements for aluminum, lead and zinc
3. Streamline approval requirements for registered brands (reduce minimum production period requirements, etc.)