Delivery Points
As a market of “last resort”, industry can use the LME’s delivery option to sell excess stock in times of oversupply and as a source of material in times of extreme shortage. In reality, physical delivery occurs in a very small percentage of cases on the LME as most organizations use the LME for hedging purposes. However, the small percentage, which does result in delivery, plays a vital role in creating price convergence.
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Famous quotes containing the words delivery and/or points:
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—Charles Dickens (1812–1870)
“Sometimes apparent resemblances of character will bring two men together and for a certain time unite them. But their mistake gradually becomes evident, and they are astonished to find themselves not only far apart, but even repelled, in some sort, at all their points of contact.”
—Sébastien-Roch Nicolas De Chamfort (1741–1794)