This is most relevant for aluminium loadings in and out of Detriot, which is operated by Metro and is an "affected" warehouse given the amount of metal there and the huge amount of cancelled warrants.
It is notable that in the last month, load-outs have actually been at a faster pace than the LME rules would require, averaging over 3.5kt per day over May.
With this business on sale for Goldman's, it appears to be a case that the Bank does not want to complicate any potential regulatory fall-out that is accompanying concerns about how some warehouses are operated.
This isn't the case for the other affected ali warehouse in Vlissingen, operated by the Glencore owned Pacorini. Net metal has been loaded into the warehouse as soon as the new LME rules were overruled back in late March.
Funnily enough, cancelled warrants have actually been falling in Vlissingen but not in Detroit, where queues for metal have remained the same. This isn't a sign that the voluntary adoption of the rules are not working, but more that more owners of metal are cancelling warrants now that metal is finally being loaded out on net.
It's also interesting that the Cash-3m contango has collapsed in the last week or so as prices have rallied somewhat, in a very similar manner to when the LME rules were supposed to take effect back in April.
This is probably a sign of broader market tension for aluminium, but these dynamics are nonetheless having a material impact on prices, spreads and premiums.
