LME open-outcry ring resumption has top brokers questioning how long it could last

A return to trading in Europe's last open-outcry venue might be short-lived, with major brokers skeptical of a future making markets on the London Metal Exchange's "ring" even after the bourse said it would reopen in September.

The LME said on Tuesday June 8 that trading would resume on the boisterous London venue, which in various forms has been a center point for global metal market price setting for more than a century.
The ring has been closed since the dawn of the Covid-19 pandemic, with the LME trialling fully electronic trading before consulting its members about whether it should make the change permanently.
Responses from the market were decidedly mixed, with physical market participants from mining companies to extruders against the switch while investment funds were largely supportive.

So the LME is now consulting on a third way, in which closing prices most used by financial players will remain electronic while market making for the "official" prices will again take place in the ring after pandemic protocols are in place. The consultation is open until July 9.


Archie Hunter

Alice Mason

June 08, 2021

19:03 GMT