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The uses of lead can be traced back to the earliest days of History. The Romans described it as the ‘basest of base metals’ due to the ease with which it could be beaten or melted. In recent time lead has come into its own with the evolution of applications such as petrol additives, pigments, chemicals, crystal glass and batteries.
The largest market for lead is in battery production, consuming approximately two thirds of the lead produced in the western world.
Lead’s relationship with the LME began before the turn of the century, although dealings were unofficial. By 1903, it was being traded in a small secondary ring, but still without an official price setting. Lead was first officially traded in 1920 and the current standard lead contract, introduced in 1953, has become the mainstay for international free trade in this metal.
LME Lead Futures Contract Specification
| Contract |
Lead of 99.970% minimum purity. Lead placed on warrant after 08/05/2001 must conform with graded lead chemical composition of BS EN 12659:1999 Standard entitled "Lead and Lead Alloys - Lead". |
| Lot size |
25 tonnes (with a tolerance of +/- 2%) |
| Form |
Ingots (pigs will be referred to as ingots) |
| Weight |
Up to 55 kg each.
Each parcel (bundles) placed on warrant shall not exceed 1.2 tonnes (01/06/1985-05/05/1992) or 1.5 tonnes after 06/05/1992. |
| Delivery dates |
Daily for 3 months forward and then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 9 months out to 15 months forward. |
| Quotation |
US dollars per tonne |
| Minimum Price Movement |
Ring - Outright $0.50, Carries $0.01
LME Select - Outright $0.25, Carries $0.01
Inter-office - Outright/Carries $0.01 |
| Clearable currencies |
US dollar; Japanese yen; sterling; euro |
LME Lead Options Contract Specification
| Delivery dates |
Monthly from the first month out to 15 months |
| Value date |
The third Wednesday of the prompt month |
| Exercise date |
The first Wednesday of the prompt month |
| Premium quotation |
US dollars per tonne |
| *Strike price |
$25 gradations for strikes from US$25 to US$3975
$50 gradations for strikes form US$4000 to US$7950
$100 gradations for all strikes over $US8000 |
*Strike price gradations and tick size for premiums available in all clearable currencies.
LME Lead TAPOS Contract Specification
| Contract date |
The business day on which the contract is traded |
| Contract period |
Calendar months up to 15, 27 or 63 months forward (in line with the underlying futures contracts). The inclusive period between the first business day and the last business day of the traded month. |
| Option type |
Calls & puts base don the monthly average settlement price (MASP) |
| Currency & strike price |
US dollars :$1 gradations
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| Premium tick size |
0.01 USD (one cent)
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| Premium payment |
Next business day after contract is traded
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| Settlement date |
Settlement is two business days after exercise
The futures trades settle as per LME rules & regulations |
Access the special contract rules for metals using the LME online rulebook.
The LME is the only exchange in the world providing facilities for the lead industry to hedge its sales and purchases. The LME futures, traded options and traded average price options (TAPOs) contracts provide the optimum combination of physical contract and risk management mechanism for today’s industry members.
As a risk management mechanism, the LME lead contract offers transparency with the security of clearing, stability through regulation, and a 24 hour global trading structure that are the hallmarks of the world’s leading non-ferrous metal exchange.
The LME has long acknowledged the global nature of the industry and has developed an international network of warehouses in Europe, Asia and th US for the delivery and take-up of the metal. In addition, it has approved brands from all the major producing companies around the world.
LME contracts may only be offered or sold to United states foreign futures and options customers by firms registered with the Commodity Futures Trading Commission (CFTC), or firms who are permitted to solicit and accept money from foreign futures and options customers for trading on the LME pursuant to CFTC rule 30.10.
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