London Metal Exchange approves Scale Distribution for Panama City warehouse
The London Metal Exchange (LME) has approved Scale Distribution for a warehouse company in Panama City, Flordia to take delivery of copper, starting next February, Reuters reports.
The Exchange approved Panama City as a location last month.
The warehouse is expected to help alleviate the long waits and stockpiles that plague the LME's warehousing practices. According to Reuters, the wait times can be months long. The number of lawsuits related to this issue reached 18 earlier this month.
Scale Distribution Inc, a warehouse company owned partly by Australia's Macquarie Group but originally British, will offer an alternative to New Orleans warehouses, where most of the Exchange's copper and zinc are now stored.
Panama City is seen as a critical location because almost all of Chile's copper exports go through it. Chile is home to the world's largest copper mine and the metal accounts for 20% of the country's GDP.
A big US copper end-user told Reuters that Panama city "could be a good source of supply for us and other users."
Last week the LME addressed its warehousing issues, approving a set of comprehensive reforms. These include limits on queue times and measures to prevent warehouse companies unreasonably incentivising the formation of queues, among others.