In the global metal-trading ecosystem everything starts with the metal producers.
Without the contributions of miners and smelters, modern life would look very different. After all, our means of transportation, communication, and energy transmission and storage, to name a few, often rely on metal. For the London Metal Exchange (LME) and its physically delivered non-ferrous contracts, metal producers are very important. The ability to take and make delivery of metal via LME contracts ensures the prices discovered on the LME are in line with the physical market. In order to guarantee quality and specification of delivered metal, the LME reviews, vets and approves individual metal producers to register their production as an LME brand.
In this article we give a high level overview of LME brands and the listing process by answering these questions:
- What is an LME brand and the importance of LME listed brands?
- Why is it important for a producer to have their metal listed on the LME as an LME brand?
- Why does the LME approve metal brands?
- How does a producer list their production on the LME as an LME brand?
- What does the suspension and delisting of a brand mean?
What is an LME brand?
An LME brand is a brand of metal that a producer has registered on the LME as deliverable against the relevant metals contract. In order to have an LME brand an applicant producer must go through an application process and meet our requirements on quality, shape, weight and responsible sourcing etc. An LME brand is an industry recognised status that shows that the brand of metal meets the LME’s specified requirements and allows owners of that LME brand of metal the additional optionality to put material on LME warrant in LME warehouses and sell it on Exchange.
LME base metal contracts are physically settled to ensure LME prices converge with physical metal markets. To support the physical delivery of the LME’s base metal contracts, the LME approves brands of metal that can be used to physically settle its contracts at the point of expiry unless a position is closed out beforehand. The LME has been approving metal brands for many years forming an integral part of the LME metals markets.
The LME maintains a list of producers and their brands which are approved for delivery against LME contracts. As of August 2024, there were more than 360brands listed on the LME from more than 55 countries. The following table gives an overview of brands per metal and the number of countries from which those brands emanate. See the full list of LME approved brands.
| LME METAL | BRANDS | COUNTRIES |
|---|---|---|
| Aluminium | 68 | 31 |
| Copper | 85 | 25 |
| Lead | 71 | 26 |
| NASAAC | 22 | 14 |
| Aluminium alloy | 25 | 20 |
| Zinc | 41 | 19 |
| Tin | 18 | 7 |
| Nickel | 233 | 11 |
| Cobalt | 10 | 8 |
| Total | 363 | 48 |
Metal that is listed as an LME brand needs to comply with the requirements outline in the Guidance Notes for the relevant metal and Part 6 of the LME Rulebook. In October 2019, the LME announced its responsible sourcing requirements following a formal market-wide consultation. The requirements for all current and future LME registered brands are to:
- Implement the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas (‘’OECD Guidance’’) through track A, B, C or confirm secondary sourcing through track D.
- Maintain an ISO 14001 environmental management system certification or equivalent.
- Maintain an ISO 45001 occupational health and safety management system certification or equivalent.
It is important to note here that only metal which features on the LME brands list can be used in the settlement of the LME’s physical contracts. Furthermore, that metal must also be delivered into one of the LME’s licensed warehouses before an electronic document representing entitlement (known as a “warrant” on the LME) can be issued.
For every LME metal there are specific warranting requirements with different rules for bundling, packaging, shape and weight. They are available in the LME Rulebook under the Special Contract Rules for each metal (Part 6).
For buyers and sellers, it is important to know exactly what constitutes deliverable material. This common base of understanding creates certainty and enables transparency for the whole supply chain and allows for the creation of a liquid futures market. Buyers who want to take delivery at the LME are assured of a minimum quality/specification of the metal they receive.
Ultimately, LME brands underpin pricing on the LME. The prices discovered on the LME derive their value directly from the deliverable material on warrant. This is especially important for the LME Official Settlement Price which serves as the reference price in commercial transactions around the world.
Why is it important for a producer to have their metal listed as an LME brand?
For producers, having their metal production listed as an LME brand has commercial benefits. The first point is recognition for meeting a globally known standard. LME prices, as we have seen, serve as reference prices in many commercial contracts.
Secondly, there are tangible benefits for owners of LME-listed metal who are also clients of LME brand producers. Owners of metal which features on the approved LME brand list have the option to deliver this metal into an LME warehouse and place it on LME warrant, thus enabling delivery against an LME contract. This is often an important consideration when discussing financing arrangements for metal with a lender. The lender will derive comfort from the fact that the metal can be sold at short notice, if required, in order to repay the outstanding borrowing. This can result in lower financing costs.
For the producer, having their metal production listed as an LME brand provides them with a market of last resort. When the COVID-19 crisis broke out globally in March 2020 and demand for metal evaporated overnight, producers had the option to deliver metal against LME contracts. This is what is called the “terminal market” function of the LME. In the normal course of business, producers primarily sell directly to clients, but if that demand falls away, LME deliverability constitutes a valuable alternative.
Why does the LME approve metal brands?
The LME delivery system relies on a user being guaranteed a specified quality and quantity of metal. This physical metal is global in scope but our contracts set tight physical and chemical specifications so that each lot of material is standardised – this is a crucial parameter for consistent price discovery and preserves the LME warehouse network as a suitable market of last resort.
The LME only approves brands of metal that meet strict specifications including quality and shape to ensure the uniformity of good quality material which underpins the LME Contracts. The process of listing, delisting and maintaining the producer brands of LME warrantable metal takes continual work and investment. New brands are continuously being added as industries evolve, and old brands are removed as smelters/refineries go offline.
The LME’s Sustainability and Physical Market Operations team works with the advice of the LME metals committees and the wider market to ensure the physical integrity of our contracts keeps up with the evolving needs and nature of the industry. This is essential when maximising contract liquidity from physical market participants, which creates more opportunities for physical and futures price convergence - a core element of our contracts.
How does a producer list their brand on the LME?
Producers of LME brands have to satisfy a number of strict quality requirements and these are further detailed below. (As mentioned, responsible sourcing requirements are not covered in this article.)
Requirements common for all metals include:
- minimum track record of 12 months in the business
- minimum production capacity – differs for each metal
- Implementation of OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas (‘’OECD Guidance’’) through track A, B, C or confirm secondary sourcing through track D.
- ISO 9001,14001 and 45001 certification – or equivalent
- Starting from October 2025, all LME listed brands, except for copper, will be required to, to upload and maintain Certificates of Analysis (“CoAs”) on LMEPassport.
- references from clients
- identify a Category 1-5 member which will process the application on behalf of the brand
- the metal will need to be quality tested. (See the details of the LME listed sampler and assayers.)
- a listing fee of $65,000 US dollars.
The requirements differ slightly from one metal to another, in order to account for their specificities.
What does the suspension and delisting of a brand mean?
In the event a producer of an LME brand no longer complies with the LME’s requirements or there has been a change that has impacted their brand listing, a brand may either be suspended or delisted:
Suspending of an LME Listed Brand:
Suspending a brand is a temporary measure and means that from a defined date it is no longer possible to issue new warrants for that brand. Any warrants already issued remain good for delivery through the LME clearing house. However, once a warrant of a suspended brand is cancelled, it is no longer possible to re-warrant either at the same warehouse or a difference warehouse. Subsequently, the suspension of a brand can be lifted.
A Notice is issued informing the market when a brand is suspended and when the suspension of a brand has been lifted. Wherever possible, not less than three months’ notice is given to the market, however, in certain circumstances a suspension can be with immediate effect or extended further than three months. Suspended brands are also referenced on the LME approved brands list.
Delisting of an LME Listed Brand:
Delisting a brand is a permanent/final measure and means that from a defined date it is no longer possible to issue new warrants for that brand. Any warrants already issued remain good for delivery through the LME clearing house. However, once a warrant of a delisted brand is cancelled, it is no longer possible to re-warrant either at the same warehouse or a different warehouse.
At the end of the delisting notice period and when there are no longer any stocks in LME warehouses, the brand is removed from the LME approved brands list. However, it is possible for a producer to reapply for listing in the future.
A notice is issued informing the market when a brand is delisted. Wherever possible, not less than three months’ notice is given to the market, however, in certain circumstances a delisting can be with immediate effect or extended further than three months.
An LME Producer should notify the LME of any of the following changes:
Company/producer name or ownership, LME brand name or physical specification including brand markings, contact details, plant closures/care & maintenance, relocations, financials status and any changes that may impact their brand listings or do not align with their original listing information.
Summary
Brands are an essential component of the LME’s physical ecosystem. A robust set of criteria to which producers adhere and a well-maintained brands list, give participants the level of certainty on which their on-exchange risk-management transactions are dependant. That certainty also underpins price discovery, and buyers and sellers of metal therefore transact on a price they can trust. Furthermore, thanks to brands, producers who list their metals on the LME gain a market of last resort as well as enhanced marketing and financing opportunities.
Contact us
If you are a metal producer and would like to explore listing your production as an LME brand, please contact our Brand operations team.
For any queries, please get in touch with our Sales team.