What Is the London Metal Exchange?

The London Metal Exchange (LME for short, full name London Metal Exchange ^[1] ) is the world's largest non-ferrous metal exchange. It was established in 1876 and is an indirect wholly-owned subsidiary of the Hong Kong Stock Exchange ^[2] . The trading varieties are copper, aluminum, lead, zinc, nickel, and aluminum alloys. The prices and stocks of exchanges have an important impact on the production and sales of non-ferrous metals worldwide.

London Metal Exchange

London Metal Exchange (LME for short, full name London Metal Exchange ^[1]

Kerb transactions are also open-outcry transactions in the trading circle, but the structure is looser than the formal trading section. Brokerage companies can commission the purchase and sale of contracts with any expiry date, and even allow more than one trader to enter the trading circle Standing behind the seat. (But they still have to stay in their usual designated position in the trading circle.) In essence, the purpose of the kerb transaction is to adjust the company's position structure that was not completed in the main trading session. Early morning trading began after the official price of the LME was finalized. They can provide the opportunity to trade very close to the official price level. Accordingly, integrated trading in the afternoon session allows companies to adjust their respective positions before the end of the day. (Not a balance of net long or short orders).

First time in the morning Second time in the afternoon

The first section (

LME is the largest in the world

Aluminum is the second largest metal after steel. Due to its light weight, good extensibility, and strong corrosion resistance, aluminum is widely used in construction, packaging, and electronics industries. In 2000, global aluminum production reached 21,191,000 tons, and the London Metal Exchange (LME) aluminum futures and options volume reached 25 million lots (about 600 million tons); from January to July 2001, the London Metal Exchange The volume of aluminum futures options reached 15,170,158 contracts (about 370 million tons). The London Metal Exchange aluminum contract is 99.7% pure aluminum with 25 tons (+/- 2%) per lot. The minimum fluctuation price of the aluminum contract is 50 cents per ton. ;

1. Aluminum ingots (12-26 kg).

2. T-shaped ingot (750 kg).

3 Large plate ingot (750 kg).

Standard delivery physical delivery

The trading month is the most recent month plus two consecutive months, and the next 12 months.

Trading time 11: 55-12: 00,

12: 50-12: 55,

15: 35-15: 40,

16: 15-16: 20

Price quoted in USD / metric ton

Minimum price beating $ 0.5 / metric ton (12.5usd / lot)

One-day fluctuation limit

The settlement day is each business day in the last 3 months, and the third Wednesday of each month for the following 12 months.

LME is actually a world-class metal exchange dating back to 1877. Like CME, it can be said that it has a hundred years of history. Metal trading in London was much earlier than there, initially copper and zinc because there were

In terms of the contracts traded by the LME, for copper contracts, if everyone is not familiar with the LME, most of the contracts are relatively large-scale, which is a bit larger than other exchanges. Such as steel, tin, lead, everyone sees it in a large amount. Copper was introduced in 1877, the largest amount traded. The nominal amount of copper is the largest. Although aluminum was introduced in 1978, the actual amount is very large. Introduced in 1979, nickel was very large in silicon. In 2002, a contract called the "Special Aluminum Alloy Contract in North America" was introduced. The introduction of this contract was mainly for delivery in the United States in order to benefit the US automotive industry. Thinking about launching a new contract must be discussed with industry consulting. You may not know the supervision of LME. In fact, it is a private exchange. It is owned by 80 shareholders. 40% of the members of the member companies are brokers. Many financial institutions and banks own LME. Members also come from the real economy, such as the manufacturing industry, and consumers. And each technology has a committee. At the committee level, there is a representative. This representative comes from various industry sectors, plus representatives of financial institutions, investment companies, and metal representatives. Explore, change this contract, can't meet the requirements of this industry, will discuss and improve at the committee level, and give it to the board for approval. In 2002, I felt that there should be a special contract with aluminum alloy. The LME index is the six major trading metals index, copper, aluminum, zinc, lead, nickel, which is published daily. LME mini contracts were launched in 2006, mainly copper, aluminum and zinc. In 2008, there was a contract for copper billets.

This is the introduction of the contract. The three services of LME, hedging is the most important, especially for China. Hedging has also been important for many years, and LME has maintained a long partnership with China-based trade. The price of the LME is used as a benchmark for post-line trading. Looking at the trading platform, LME has three trading platforms, one is electronic trading, which will be introduced in detail later. Open in London time, at 8 o'clock in China, 9 o'clock in winter, starting on the trading day, and ending at 7 o'clock in the evening at London time, the trading day ends from such trading hours. Telephone trading options trading, as well as large-scale project financing transactions. In front of the over-the-counter trading, you saw the on-site outcry. There is still such a way in Europe. CME also has this kind of floor trading in the United States, which is part of our day trading. Because floor trading is very important. Trading on the floor, the official price will be set in the second quarter of the morning.

Compared with other exchanges, how to use LME for basic hedging. First of all, there are no site restrictions on LME, there are no restrictions on futures positions, there may be some restrictions on inventory, positions must exceed 50% of inventory, and certain rules must be followed to ensure that this inventory will not be manipulated. Futures positions are regulated, but there are no restrictions on positions and no restrictions on prices. There are not many restrictions on prices. Telephone transactions are 24 hours. Most LME members are brokerage companies. They have offices in various cities and time zones. Many brokerage companies have their own offices in Singapore, Hong Kong, and Shanghai. Their time zones For transactions, there will always be a price within 24 hours. We will visit through LME member companies. You don't need to be a member of LME to conduct transactions. You must open an account for transactions through our members. Now let s take a look at the growth of electronic trading, because in the Asian market, it is now promoting the development of electronic trading. Obviously, this is also the global electronic trading market. Seeing that in the Asian region, electronic trading can be said to be flourishing. There is an LME trading system, which is 23% year-on-year. So far, this is the year-on-year growth rate. In 2001, the electronic trading system was launched. The first few years were not very popular. Since 2008, this electronic trading system has developed rapidly.