HOTTER ON METALS: LME targets copper volumes growth with implied pricing

The London Metal Exchange is to roll out implied pricing across its key base metals contracts from the end of July in a bid to capture growth in copper volumes from Asia, and particularly from China.

Earlier on Tuesday, the exchange said it would offer implied pricing for aluminium, copper, lead, nickel, tin and zinc starting from 30 July. The rollout is designed to be dynamic, with the exchange tweaking the process as it develops.
The implied pricing services will be available on the exchange’s electronic trading platform, LMEselect, with the aim of generating liquidity on its third Wednesday contracts.
The idea was first raised around a year ago when the LME consulted its members on its future strategic direction via a discussion paper.
Although implied pricing wasn’t a specific commitment that came out of that process, it has since become a significant part of the LME’s desire to back away from aggressively promoting monthly contracts and instead letting market users make their own choice.

In fact, the incentive schemes launched to promote the third Wednesday contracts actually increased total LMEselect three-month volumes...


Andrea Hotter

July 17, 2018

15:12 GMT

New York