LME makes "position lending rules" permanent to combat market squeezes
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If a position holder holds more than 50% of the available inventory in the LME warehouse system within one month before the contract expires, they must lend their position to other buyers at a capped rate (i.e., at a low price or zero cost) until the holding ratio drops below 50%. Compared to the temporary rules in 2025, this not only expands the scope of application but also brings front-month option positions under the regulatory framework. This move is a response to large trading giants such as Mercuria (Vitol), Vitol, and Gunvor accumulating massive positions in the aluminum market (sometimes even exceeding available inventory).
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