UPDATE 1-Glencore Xstrata's Pacorini delists 14 metals warehouses in Dutch port
LONDON Feb 11 (Reuters) - Glencore Xstrata's Pacorini has delisted 14 metals warehouses in the Dutch port of Vlissingen, the London Metal Exchange (LME) said on Tuesday, as storage firms get ready for big changes in the business.
The LME, the world's largest marketplace for metals such as copper and aluminium, announced new regulations aimed at cutting wait times to access metal in warehouses following complaints, lawsuits and regulatory pressure.
Pacorini in Vlissingen has rivalled Goldman Sachs's Metro warehousing subsidiary in Detroit in having the longest queues for aluminium. Wait times for both still stretch for longer than a year.
To support the mechanism of physical delivery the LME approves and licenses a network of warehouses around the world. Warehouse companies must meet strict criteria before they are approved to handle metals.
Pacorini currently has more than 40 warehouses in Vlissingen, according to LME data. Industry sources say the 14 delisted warehouses are in any case empty, and had been built with future expansion in mind, before the LME announced its changes last year.
Macquarie analyst Colin Hamilton said there is a good chance that the empty warehouses would be used to store off-exchange metal, thus reducing the market visibility of stocks.
"We're seeing redistribution of LME stocks and stock moving off exchange," Hamilton said. "There is nothing wrong with it, the companies are well within their rights, but it doesn't help the LME's relevance to the market."
On Monday, Trafigura's Impala Terminals UK Ltd delisted eight metals warehouses in Antwerp.