The London Metal Exchange (LME) is a futures and forwards exchange in

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

with the world's largest market in standardised

forward contract In finance, a forward contract, or simply a forward, is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on in the contract, making it a type of derivative instrument.John C Hu ...

futures contract In finance, a futures contract (sometimes called futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The item tr ...

s and options on base metals. The exchange also offers contracts on ferrous metals and

precious metals Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Precious metals, particularly the noble metals, are more corrosion resistant and less chemically reactive than most elements. They are usual ...

. The company also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of physical delivery to settle contracts.

Overview

Ring trading

Trading times are 11:40 to 17:00. The LME is the last exchange in Europe where open-outcry trading takes place.BBC Radio 4 '' Today'', broadcast 25 October 2011. The ring was temporarily closed in March 2020 due to the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

. In January 2021, LME proposed closing the ring, Europe's last open-outcry trading floor, and moving permanently to an electronic system. However, the ring reopened in September of the same year after resistance from members. In addition to the 9 companies that have exclusive rights to trade in the ring, around 100 companies are involved in the LME in total.

Precious metals

The LME used, however, to provide trade matching and clearing services to the London bullion market and distributes gold, silver, and gold IRS ( interest rate swaps) forward rates on behalf of the LBMA.

Electronic trading

The LME launched an electronic platform called LME Select launched in February 2001. This was developed by a Swedish software house Cinnober. The platform is a FIX-based trading platform, and now handles a majority of the total LME business.

LME Clear

LME Clear is the clearing house for the London Metal Exchange. Launched in 2014 it was designed and built in consultation with the market to provide cost-efficient, EMIR compliant clearing and settlement services, using cutting-edge technology. LME Clear has announced the appointment of David Warren as Chairman effective July 20, 2023. David will succeed Marco Strimer, who will step down as chairman at the end of his term of office.

History

LME can trace its history to metals trading in

Royal Exchange, London The Royal Exchange in London was founded in the 16th century by the merchant Sir Thomas Gresham on the suggestion of his factor (agent), factor Richard Clough to act as a centre of commerce for the City of London. The site was provided by the Ci ...

. It was purchased by Hong Kong Exchanges and Clearing in 2012. In March 2022, LME was sued by Elliott Management, an American hedge fund. The hedge fund sued for $456 million, claiming that LME acted "unreasonably and irrationally" when it canceled nickel trades made on March 8, 2022. Jane Street Global Trading also sued LME for $15.3 million over its cancelled nickel trades in March. Both lawsuits were filed in the

High Court of Justice The High Court of Justice in London, known properly as His Majesty's High Court of Justice in England, together with the Court of Appeal (England and Wales), Court of Appeal and the Crown Court, are the Courts of England and Wales, Senior Cour ...

. In November 2023, the court ruled in LME's favor, with Elliott and Jane Street appealing the decision to the Court of Appeals. In March 2025, the

Financial Conduct Authority The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom. It operates independently of the UK Government and is financed by charging fees to members of the financial services industry. The FCA regulates financi ...

fined the London Metal Exchange £9.2m after it failed to prevent extreme volatility in the nickel market in March 2022.

References

External links

London Metal Exchange
{{Coord, 51, 31, 16, N, 0, 5, 15, W, type:landmark_region:GB, display=title Financial services companies established in 1877 Commodity exchanges in the United Kingdom Organisations based in the City of London Buildings and structures in the City of London Futures exchanges 1877 establishments in the United Kingdom Organizations established in 1877 Metal industry in the United Kingdom 2012 mergers and acquisitions