09 Aug 2013

Commodities in Focus Briefing

The controversy over queues at LME registered warehouses has become a hot topic for the mainstream media in 2013, amidst accusations that prices are being manipulated by banks and others at the expense of the "real" economy.

It has led to probes from the Senate Banking Committee and Commodity Futures Trading Commission in the US and to several US class actions being issued against the LME and warehouse owners.

This warehousing controversy undoubtedly takes some of the gloss off the record volumes that have been traded during HKEx's first year as owner of the LME and presents an immediate challenge for the incoming chief executive, Garry Jones.

In this edition of CiF, our first article looks at the latest LME proposals to reduce warehouse queues and considers their potential impact. Continuing the metals theme, we review two reported cases from earlier this year involving MRI Trading and Konkola Copper Mines. Finally, we provide an overview of forfaiting and the ICC's new Uniform Rules for Forfaiting (URF 800).

View this edition.