LONDON Dec 30 Warehouse firms in the London
Metal Exchange's network of more than 600 warehouses in 37
locations have announced significantly lower rent rises for the
year starting in April, the exchange said in a release on
The LME said this year it would freeze the maximum rate for
five years to curb surging costs, the final reform in a
three-year series of changes at the 139-year-old exchange, which
have also included tough rules to slash delivery backlogs.
The average increase for 2017-2018 will be 3 percent for
rent and 2 percent of free-on-truck charges (FOT), compared with
increases of 7 percent and 9 percent respectively set for this
year, the exchange said.
Owners of LME-approved warehouses include Henry Bath, partly
owned by trading house Mercuria and partly by Chinese logistics
company CMSTD, Metro International Trade Services, which was
bought by investment firm Reuben Brothers in 2014, and Steinweg
The overhaul of the LME's warehousing system started more
than five years ago, due to a controversy surrounding queues to
get metal released from storage, which in some cases resulted in
months of waiting times.
The LME, owned by Hong Kong Exchanges and Clearing Ltd.
, had previously said that once the freeze ended, rates
would rise annually based on the consumer price index in each
(Reporting by Clara Denina; editing by Susan Thomas)