What are the advantages for a producer to list their billet brands?
When LME registered billet enters an LME approved warehouse a warrant (warehouse receipt) is issued. This warrant is a bearer document. All metal on LME warrant is held under strict guidelines, including protection from local tax and bankruptcy laws. All material is audited by the specialist LME executive and also PWC at least once a year. These controls mean that the holder of an LME warrant has secure and fungible ownership of the metal. Financing banks recognise the superiority of an LME warrant and are therefore able to offer excellent terms, close to cash when financing. LME warrants can also be pledged as security for loans. The LME trading model favours not only the producer but also all their potential customers as banks are more likely to finance the material regardless of ownership status. For this reason, in the non-ferrous industry, LME registered metal commands a premium over metal which is not registered.
