Where the changes begin
On August 7, the London Metal Exchange (LME) released a statement noting that in March, it had published a consultation and discussion paper exploring multiple potential enhancements to its physical market operations, particularly its warehousing network. Based on market feedback, the LME has decided to revise its delivery location approval policy, warehouse agreements, and LME rules. Amendments to the warehouse agreement will take effect on October 30, 2026.
Key modifications include:
1. Enhanced information barriers for warehouses
Under the new exchange rules, each Related Warehouse must maintain effective information barriers with its associated trading companies, and Non-Related Warehouses must also maintain effective information barrier mechanisms. Each Related Warehouse and Non-Related Warehouse must engage a licensed accounting firm (subject to exchange approval) to ensure its information barrier setup meets exchange standards. The LME will issue a separate market notice detailing the requirements for "Non-Related Warehouses" regarding the handling of price-sensitive information. Non-Related Warehouses must establish information barriers by January 1, 2027, and must submit a compliance report from a Practitioner regarding these information barrier measures to the LME by April 30, 2028.
2. Rent and FOT caps
Current rent and Free-On-Truck (FOT) caps will remain in place until the first quarter of 2032.
3. Re-warranting fee cap
The cap for re-warranting fees will be set at USD 10 per metric ton and will be announced alongside other annual fees in October 2026.
4. Restrictions on certain storage fee increases and notification periods
The LME requires warehouse companies to provide at least three months' notice to the LME and give separate notification to the market when increasing fees for the following services by 20% or more: free on rail, free alongside, free in container yard, and slot rescheduling services. The LME stipulates that if a fee for any of these services has been increased by 20% or more (either in a single instance or cumulatively over 12 months), the fee for that service cannot be increased again in the subsequent 12 months.
5. Copper – Introduction of quality inspection reports and permanent markings
After reviewing feedback on the Consultation Paper, the LME has decided to proceed with the following requirements: All LME-listed copper must be accompanied by a Certificate of Analysis (CoA); all LME-listed copper must have a Production Cast Reference (PCR) permanently marked on the metal. The LME believes that introducing CoA and permanent PCR markings for copper will help: enhance data integrity and traceability for LME-registered copper, supporting digital supply chain management and future tracking; support the ongoing digitalisation of the physical market, thereby improving market efficiency and transparency; and achieve greater consistency with other LME metals that already require a CoA for warrant registration. Considering market feedback—particularly concerns regarding the implementation method and timeline for the permanent marking requirement on copper—the LME has decided to extend the implementation period for this requirement. January 1, 2028, remains the effective date for the copper CoA regime. However, for the permanent PCR marking requirement, the LME will establish a two-year transition period. Copper produced before January 1, 2028, that has a Paper CoA convertible to a Basic eCoA or already holds an Enhanced eCoA will be eligible for warrant registration from January 1, 2028. Copper produced after January 1, 2028, must be accompanied by an Enhanced eCoA generated through LMEpassport and must be traceable to a verifiable PCR: a Production Label; or an Acceptable Indelible Marking. Copper produced after January 1, 2030, must bear a compliant permanent PCR marking to be eligible for warrant registration. As of January 1, 2030, metal already in warrant status without a permanent PCR marking or CoA will be permitted to remain in warrant until the warrant is cancelled.
6. Automatic upload of metal reports
A Metal Report is a document that LME-registered warehouses can provide upon request from a warrant holder. This report details the physical metal information corresponding to the warrant, including chemical composition, LME Brand, Cast Number, and other relevant supporting data. The LME will require warehouses to upload the Metal Report via API or Excel file to LMEpassport when generating a warrant for the metal. By automating this process, warrant holders will be able to directly enter the Warrant ID into LMEpassport to identify the physical metal corresponding to their warrant, without needing to request the documents from the warehouse. The system will automatically link the relevant metal data in the background and display it to the user through a unified interface. This feature will enable users to more easily access information about the metals they hold, improve the transparency and credibility of warehoused metal holdings, reduce administrative workload, and provide a faster, more efficient user experience. These requirements will take effect on December 1, 2026.
New consultation topics
Simultaneously, the LME announced it will seek market opinions on the following three aspects, with the feedback deadline set for September 11, 2026:
1. Whether to allow primary aluminium to be stored outdoors (with a specific discussion for Hong Kong)
2. Whether to introduce permanent marking requirements for aluminium, lead, and zinc
3. Streamlining requirements for brand registration approval (including reducing minimum production period requirements, etc.)