Citi delivers lead to LME warehouses for profitable rent deals

Pratima Desai

Wed, Mar 19, 2025, 6:08 AM 2 min read

By Pratima Desai

LONDON (Reuters) - Significant amounts of pb person been deposited successful London Metal Exchange (LME) approved warehouses by Citigroup for alleged rent-sharing deals implicit the past fewer days, 3 sources acquainted with the substance said.

Rent deals are profitable agreements nether which LME-registered warehouses stock fees oregon rental income with companies that present metallic to them.

It is not known precisely however overmuch pb Citi delivered to LME warehouses. But LME information shows stocks of the artillery worldly successful Singapore jumped 15% oregon 27,250 metric tons successful the 4 days to March 18 to 206,350 tons.

Citi declined to comment.

Much of the pb successful warehouses successful Singapore, amounting to 90% of the full successful the LME's web astir the world, is nether rent deals, the sources said.

Companies that present metallic for rent deals bash not person to clasp ownership of the metal, but they get a stock of the rent, paid by the caller owners, for arsenic agelong arsenic the metallic stays successful that warehouse.

Rent for metallic connected LME warrant, a rubric papers conferring ownership, is importantly higher than for metallic successful warehouses that is not connected warrant.

LME warehouse regular rent for pb successful Singapore is 51 U.S. cents a ton, which for 27,250 tons would magnitude to astir $14,000 a day.

These deals are imaginable due to the fact that companies are capable to bargain cheaper adjacent pb contracts and merchantability higher priced contracts further on the maturity curve.

Specifically, the discount for the currency against the three-month pb declaration roseate supra $40 a ton successful February.

Part of the crushed for the discount is surpluses, which analysts astatine Macquarie estimation astatine 76,000 tons this year, up from 55,000 tons successful 2024.

(Reporting by Pratima Desai; editing by Kirsten Donovan)