LME Reversal on Trading Floor May Kill It Anyway, Brokers Warn
- Dealers say new LME plan may make operating on floor unviable
- Ring dealers might only be active for two hours a day: Marex
This article is for subscribers only.
The London Metal Exchange has bowed to pressure not to close its iconic trading floor, but the brokers who trade on it aren’t celebrating. Instead, they’re warning a compromise plan to reopen “the Ring” could prove its downfall.
The LME on Tuesday reversed course on an earlier proposal and said that open-outcry trading would resume in September, in a victory for floor traders and physical users who’ve been lobbying hard to save it. But the Ring will only be used to set so-called official prices -- which are widely used in the physical industry and are established around lunchtime -- while evening closing prices will be set electronically. That potentially deprives Ring dealers of an important revenue stream.