The London Metal Exchange is satisfied with its current lending guidelines for dominant position holders and has no plans to identify speculative market participants even as tin spreads widened dramatically again, Metal Bulletin reports. “We are always looking at ways to better serve the market, but we have no plans to change,” said an LME spokesman. His comments came after a number of large positions in the base metals contracts – including copper, tin and lead – have built up in recent months. As of Friday the LME had not received any official complaints regarding positions in copper, lead or tin, the spokesman told MB.
Tin spreads increased suddenly for the second time in less than a month on Monday as one market participant continues to hold a long futures position of 40% or more of open interest with a September third Wednesday prompt date, according to LME data from July 30, the most recent futures banding report. There has also been a rising concentration of LME warrants held by one party in the last week – the July 30 data shows a holder of 50-80% of total LME warrants, up from 30-40% a week earlier. The build-up of long positions and borrowing on the September-December spread has created a backwardation of around $1,000- 1,300 per tonne over that period, according to market participants.
