The London Metal Exchange (LME) today published a response to its combined consultation and discussion paper, issued in March, that considered enhancements to its physical market infrastructure.

The LME will take forward all of the proposals in the consultation section of the March document.

Based on feedback to the discussion paper section of the document, the LME will take forward two of those items, together with a new approach to safely expedite brand listings. The specific proposed rules associated with those three topics are contained in a further consultation paper, which the LME published today.

The proposals reflect the LME’s goals of keeping pace with market developments, meeting the needs of users and improving operational transparency and efficiency.

Today’s consultation paper

The proposals in the consultation are:

• Reducing the minimum period (currently 12 months), for which a producer must have been in production before their brand application can be considered for listing. Currently the process is in two stages: Stage One, the submission and review of the application and Stage Two, the testing and approval to list the brand. For copper, it is proposed this would be amended to a minimum of six months of production before submission of an application, and production would need to reach 12 months before the start of Stage Two. For aluminium, lead, zinc, nickel and tin, it is proposed production would be a minimum of six months with no further time requirement before progressing to Stage Two. Cobalt would need to reach six months before application and 12 months of production before listing, under the proposal. Further efficiencies to the sampling and assaying process, again without compromising standards, are also proposed.
• Permitting primary aluminium to be stored outside, but in Hong Kong only. The LME is aware of growing interest in arbitrage trading in aluminium between the Chinese Mainland and the LME’s global warehouse network. Hong Kong would be an attractive geographical location for this arbitrage – but has not yet been able to play this role, given limited indoor space in Hong Kong and the fact that aluminium, as a lighter metal, takes more storage space per metric tonne than lead or zinc. These factors, combined with the low risk of ice formation on metal stored outside in Hong Kong, mean that the LME considers it appropriate to propose this approach.
• Requiring indelible markings of the Production Cast Reference (PCR) for new brands and shapes of primary aluminium, lead and zinc brands, are also proposed (in addition to copper, which had a similar proposal in the March consultation). Many producers already use indelible PCRs and this change would eliminate the issues seen when labels are damaged or detached.

Responses to the consultation paper should be made by 11 September 2026.

Outcome of the March Consultation

All of the changes consulted on in the consultation section of the paper issued in March will be implemented:

• The extension of the requirement for the auditing of warehouse companies’ procedures around confidentiality to cover all warehouse companies, will take effect from 1 January 2027.
• The current rent and Free on Truck (FOT) charge cap will be extended to cover the period 2027-2032.
• Listing of FOT charge caps will be currency-standardised, although the option to pay in local currency will remain.
• Re-warranting charges will be capped at US$10 per metric tonne and warehouse companies will need to give 90 days’ notice of increases to ancillary fees.
• Copper will require a Certificate of Analysis (CoA), aligning it with other LME-listed metals, as well as an indelibly marked PCR. This will improve traceability for LME copper and support market digitalisation. The changes will be phased in, so that by 1 January 2030, metal will only be eligible for warranting (including re-warranting) where it has an electronic CoA and an indelible PCR marking. In response to consultation feedback, more time is being provided for the implementation of indelible marking, which can also be written manually, if producers do not wish to invest in automated equipment.
• Warehouse companies will be required to submit the data for metal reports at the time of warrant issuance (rather than on request or cancellation).