LME Considers Overhaul of Warehouse Rent System with Daily Load-Out Rates

The London Metal Exchange (LME) is considering a significant shift in its warehouse rent policies, potentially replacing existing caps with a fixed daily load-out rate. The move, announced on Monday, March 9, 2026, is part of a broader consultation on enhancements to the exchange’s physical market infrastructure.

Current System and Proposed Changes

Currently, the LME imposes rent caps on its network of warehouses. Under the existing system, rent is reduced to zero if a warehouse fails to load out the required metal within 80 days. The LME is now exploring a system that would require warehouses to load out 1.5% of the metal on warrant – metal available to the market – on a daily basis. Reuters and Mining.com both reported on the proposed changes.

Addressing Warehouse Gridlock

The proposed changes come after the LME signaled in early 2025 its intention to revamp storage rules to address persistent warehouse gridlock. Global Banking and Finance Review highlights this as a key driver for the consultation.

Further Consultation Topics

Beyond the daily load-out rate, the LME is also seeking feedback on two additional areas:

• Evergreen Rent Deals: The exchange is considering ending “evergreen” rent deals, which allow entities placing metal on warrant to receive a share of the rent collected from subsequent owners.
• Storage Conditions: The LME will reassess the requirement for aluminum to be stored indoors and evaluate whether warehouses should be strategically located in areas of net consumption.

Citi and Rent-Sharing Deals

Recent activity involving Citigroup has brought attention to the existing rent-sharing arrangements. Yahoo Finance reported that Citigroup has deposited significant amounts of lead into LME-approved warehouses in recent days, reportedly for rent-sharing deals.

Looking Ahead

The LME’s consultation on these proposed changes marks a potentially significant shift in how metal is stored and delivered within its network. The outcome of this consultation will likely have implications for warehouse operators, metal traders, and the efficiency and transparency of the LME’s physical market.