Reuters, citing traders, reported that steel billet warrants held by bankrupt brokerage firm MF Global and suspended by the London Metal Exchange on Friday belong to privately held UK steel house Stemcor.

Several traders identified Stemcor as the party holding the steel warrants through broker MF Global when it filed for bankruptcy protection on October 31.

Stemcor was not immediately available for comment.

Traders said the suspension would constrict supply and may dissuade new participants from joining the nearly four year old market in LME steel futures, which are still constrained by a lack of liquidity. A steel trader at a category two LME member said “It will affect the market and make it tighter for a period of time.”

The LME suspended the validity of 274 steel billet warrants held by MF Global on Friday, but did not identify the actual owner of the warrants. The suspension took place after the administrator took control of the warrants and was unable to adhere to exchange lending guidance.

(Sourced from Reuters)