Core Viewpoint - The London Metal Exchange (LME) plans to establish permanent rules to limit large positions in near-month contracts when inventories are low, aiming to maintain market order and prevent manipulation [1][2]. Group 1: Inventory and Market Conditions - LME copper inventory dropped from 248,000 tons in February to 99,200 tons in June, a decline of 60%, leading to a significant increase in copper premiums [1]. - Zinc inventory has decreased by approximately 85% this year, with current available stock at only 24,425 tons, insufficient to meet one day's global consumption [2]. - The premium for near-month zinc contracts surged to a historical high of $339 per ton, reflecting the impact of low inventory on market dynamics [2]. Group 2: Temporary and Permanent Measures - The temporary measures introduced in June required holders of long positions exceeding total inventory levels to lend metal back to the market at zero premium, successfully reducing large aluminum positions held by entities like Mercuria [1]. - The proposed permanent rules will extend the temporary measures, mandating that any participant holding long positions above total inventory must lend metal at zero premium and will broaden the restrictions on "tom-next" positions [2]. Group 3: Regulatory Transition and Industry Impact - The public consultation period for the permanent rules will last until November 21, with the changes seen as a preparation for LME's authority over market position limits starting July 2026 [3]. - The implementation of permanent rules is expected to limit speculative capital's ability to manipulate the market due to low inventories, although it may affect hedging operations for some entities [3].