What do new rules at LME mean for metal prices?

Weeble posted an interesting question, which I don't know the answer to, but I can guess:

Albert, I always find your blog very educational.
I am interested in what you think of the following. It seems to me to be a big deal but nobody is commenting on it. Will it cause more bullion to come in to the market short term or will the increase in transparency show the weakness in the system? Thanks.
http://uk.reuters.com/article/2013/11/07/uk-lme-warehouses-idUKBRE9A611O20131107

So basically the LME shortens the warehousing queues by decreasing waiting time duration to 100 days (July 2013) and now to 50 days (November 2013). Beginning from April next year.

I'm not an expert on LME warehousing. But what I've read is that traders think it will make prices of commodities go down, because all that supply goes into the market and it would become less attractive for warehousing companies to bid for metal. On the other hand, this change in plans means lower warehouse levels and that will make delivery more difficult. There will be delays. What if there is a sudden demand in copper in China while warehouse levels are lower and what if dealers need to deliver on the expiring short positions. We will see backwardation. As a matter of fact, backwardation is correlated with LME copper levels as shown below.

You can see that LME copper levels go up and down (Chart 1) in striking similarity with the copper contango curve (Chart 2: red graph). It's too early to make conclusions though...

Chart 1: Copper Warehouse Stocks Level

Chart 2: Copper Contango Theory

And as you know from the copper contango theory, if copper goes into backwardation, the copper price will go up. So a lower LME warehouse level due to the new rules at the LME, will result in higher copper prices. That's my guess.

Remember what we had in the nickel market. We almost had a nickel default at the LME in 2006.

Excerpts from the LME’s press release of August 16, 2006:
Those with short positions in nickel falling prompt on Friday 18 August 2006, and on subsequent prompt dates until further notice, who are unable to effect physical delivery an/or unable to borrow metal at a backwardation of no more than $300.00 per tonne per day, shall be able to defer delivery for a day at a penalty of $300.00 per tonne. Those with long positions for prompt on those days who are subject to deferred delivery shall be entitled to compensation of $300.00 per tonne per day

And what happened when nickel was at record low stock levels? The nickel price soared afterwards.

Chart 3: Nickel stock levels Vs. Nickel Price

Everything points to higher prices in my opinion.