Exchange warehouse

An exchange warehouse is a storage facility approved by a futures exchange to hold a commodity that can be delivered against a contract, subject to the exchange's rules.

Exchange warehouses are facilities that a futures exchange has inspected and formally approved to store a commodity that can be delivered against its contracts. Only metal, grain, or other material held in one of these approved locations, meeting the exchange’s grading rules, counts toward the deliverable supply that backs the market.

Not everything in an exchange warehouse is available to the market at any moment: material only becomes certified stock once its owner completes the registration process, and owners sometimes hold metal there uncertified if they do not intend to offer it for delivery. The location and ownership concentration of exchange warehouse stocks matters to traders, since metal sitting far from where it is needed, or controlled by a single large holder, behaves differently from broadly available inventory.