* Glencore storage centre Vlissingen loses out to rival Antwerp
* Antwerp has 87 pct of copper stocks in Europe's LME warehouses
* Rule to protect easy access to copper in Europe has not worked
By Susan Thomas and Maytaal Angel
LONDON, May 10 (Reuters) - Glencore Xstrata's metals warehouse firm is unhappy the London Metal Exchange (LME) has excluded it from valuable copper storage business in Europe, leaving the field open to rival trader Trafigura, and wants the ban lifted.
Firms running warehouses registered by the LME, the world's biggest industrial metals marketplace, have been making money by building up big stocks and allowing queues to grow for consumers to withdraw material, meanwhile charging rent for storage.
A year ago the LME, responding to complaints from industrial users waiting to pick up metal bought via the exchange, banned warehouses in the Dutch port of Vlissingen, where Glencore's Pacorini Metals dominates, from sucking in more copper.
Pacorini argues this handed a golden advantage to Antwerp, where Trafigura's North European Marine Services (NEMS) warehousing unit has sheds and has been accumulating copper ever since, three metals industry sources with knowledge of the matter said.
Queues like those that had appeared in Vlissingen, where Pacorini Metals owns 43 of 45 warehouses monitored by the exchange, quickly began to develop in Antwerp and the LME has not responded with a similar ban at the Belgian port.
"Because there is another large warehouse company in Antwerp that has a significant queue, effectively the rule for Vlissingen is disadvantaging Glencore against Trafigura," one industry source said.
"And the rule has not kept copper free in Europe because Antwerp is locking it up anyway," said the source.
Glencore declined to comment on the warehouse issue. Pacorini has a policy of not commenting to news media.
Many clients of the LME, recently acquired by Hong Kong Exchanges and Clearing, want to rely on the futures exchange and its global warehouse network as a means to secure assured quality metal to make items like wire and tubes. They see the warehouse queues and rentals, so profitable for shed owners, as damaging the LME as their market of last resort.
Pacorini's case will be considered next month at a meeting of the LME's copper committee, which includes industrial copper users, who will put any recommendation to the LME's executive body, which will then decide whether to relist the Dutch port, the sources, who declined to be named, said.
When the LME said in April 2012 it would delist Vlissingen from taking delivery of copper from July that year, it believed there was enough warehouse capacity in the Antwerp/Rotterdam area to keep copper available in Europe.
The volume of metal stored in Antwerp warehouses monitored by the LME has risen by about 170 percent since January to more than 120,000 tonnes, accounting for some 87 percent of all copper inventory in LME-approved warehouses in Europe.
Industry sources said the bulk of this copper is in facilities controlled by NEMS, the single biggest warehouse owner in the port with 27 of the 67 sheds there.
The sources say the LME cannot impose a Vlissingen-style ban in Antwerp because it would also hit non-Trafigura warehouses there, which are not freezing up a lot of copper.
In Rotterdam, which is largely dominated by independent warehousing firms, copper inventories have more than halved since January to some 7,000 tonnes.
The exodus is partly explained by the incentives warehousing companies tied to major trade houses and banks are able to pay to attract metal, while independents cannot afford the cost.
"They (NEMS) have taken everything they can get from other warehouses, and now they're in the process of building a queue," said an executive at a warehousing firm.
Warehousers blame delivery delays on the sheer logistical problem of shifting tonnes of material and say copper is slow to emerge from sheds because it has to take its place behind existing queues for other metals like aluminium or zinc.
The LME tried from April 1 to respond to this with new rules on the rates at which metal must be delivered out of warehouses.
Warehouses that have major queues for one metal - sometimes more than a year - must deliver out 3,000 tonnes a day of that metal, and the new rules mean they must add an additional 500 tonnes of other metals caught up in the delays.
A second metals industry source said this would in theory ensure queues for copper could not so easily form behind the big aluminium backlogs in Vlissingen.
Also, with Rotterdam almost out of copper, Antwerp has become the sole location to access the metal in northern Europe and this further strengthens the case for a relaxation in the curbs that the copper committee strongly supported last year.
"The copper committee has very strong views...but it can't really sustain what is a partial rule in this case. It's no longer doing any good," the first source said.