Topical updates
The London Metal Exchange action plan
The LME Group launched market consultations as part of our 'Strengthening the market action plan'. These proposals are designed to bring greater visibility of unwarranted metal stocks and enhance the Closing Price discovery process by expanding the use of VWAP in the LME’s methodology. The LME also announced changes to daily price limits for aluminium and copper, decreasing them from 15% to 12% from 24 July 2023. The details and related documents to the LME’s ‘Strengthening the market’ initiative can be found here.
Monthly 3rd Wednesday prices on lme.com
15-minute delayed prices for the Monthly (3rd Wednesday) non-ferrous contracts are now available on lme.com. Bid-offer prices and quantity for the first six months of each contract are available on the ‘intraday prices’ tab, which can be accessed via the individual page for each non-ferrous metal. Please see the Non-ferrous metals page for the featured links to each metal.
Market overview
LME base metals - price activity
Base metals continued to trend lower in Q2 2023
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LME average daily monthly volume
Q2 2023 was the strongest quarter for volumes since Q1 2022
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LME futures open interest
Future open interest continued to climb in Q2
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Cash-settled futures - ferrous and aluminium premiums
LME ferrous market price summary
Ferrous prices retraced in Q2 2023
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LME ferrous monthly volume
Ferrous volumes continue to grow, with an ADV in Q2 of ~3000
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LME Aluminium cash-settled products open interest
Aggregate Premium Open Interest fell below 1500 lots in May and June
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LME trading volumes by venue
Electronic volume rose above 40% of overall volume in May 2023
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~65 per cent of medium dated spreads (carries) volume trades on LMEselect, while long carries are mostly traded in the inter-office (broker) market
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LME electronic liquidity
LME electronic liquidity - peak periods
~1/3 of all contract volume is traded during the major roll period (5 to 9 business days)
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LME electronic liquidity - spread contracts
Roll period days are the peak periods for liquidity
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3M to monthly spreads - bid-offer (ticks)
Liquidity clusters in the 3m to month 3/month 4 spreads
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3M to monthly spreads - when the screen is traded
Trading is skewed towards the end of day, despite active quotes throughout the session
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LME monthly 3rd Wednesday contracts
LME monthly (3rd Wednesday) electronic volumes
Q2 2023 was a record quarter, with more than 50,000 lots traded
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LME monthly contracts - liquidity clusters (hours)
On-screen monthly liquidity is available throughout UK trading hours, with heavier trading later in session
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LME monthly contracts - liquidity clusters (days)
On-screen liquidity for monthly (3rd Wed) contracts peaks around roll period days
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LME monthly contracts - quoted periods
Monthly (3rd Wed) markets are actively quoted throughout UK trading hours
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LME monthly contracts - bid-offer spreads (ticks)
Monthly (3rd Wed) contracts have robust on-screen liquidity, combining implied pricing and direct bids and offers in the contracts
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LME monthly contracts - bid-offer spreads ($)
Monthly (3rd Wed) contracts have robust on-screen liquidity, combining implied pricing and direct bids and offers in the contracts
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LME options
LME prices historic volatility
Zinc volatility rallied from a two year low during Q2 2023
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LME base ATM volatility
ATM Vol for Nickel fell below 40 during Q2
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Average daily monthly volumes
Daily copper volumes overtook Aluminium in Q2
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LME options and TAPOs open interest
Non-ferrous open interest remained stable at ~350,000 during Q2
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LME realised vs implied volatility - aluminium
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LME realised vs implied volatility - copper
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LME realised vs implied volatility - zinc
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LME realised vs implied volatility - nickel
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LME realised vs implied volatility - lead
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Responsible sourcing and sustainability
Responsible sourcing
The LME published the Responsible Sourcing Handbook, which includes the new Guidance Note on Conflict-Affected and High-Risk Areas (“CAHRAs”). A majority of Track B and Track C brand producers met the 30 June 2023 deadline, and the LME is pleased with the high response rate. The LME participated in a series of webinars with Track A standards to ensure producers have all the information they need to comply with our 31 December 2023 deadline.
LMEpassport
The LME launched a new producer profile to act as a simple one pager that any user can search for, to see an overarching company, its LME brands and all of its associated ESG credentials.
We have recently released an explanatory video to guide producers through this new feature. Producers voluntarily add sustainability credentials to LMEpassport and corporate and brand level sustainability data can be disclosed. 234 brands (of ~450 LME-listed brands) and ~490 disclosures are now listed on LMEpassport across 25 ESG disclosure types.
LME sustainability
Details regarding the LME’s sustainability initiatives can be found here. The LME has announced a commitment to it’s own net-zero target of 2040, using the Science Based Target initiative (SBTi).
The LME celebrated its first Earth Day which involved a week-long series of talks, articles and employee engagement events designed to raise awareness on both internal and external sustainability initiatives.
LMEpassport sustainability - who is it for?
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LME responsible sourcing deadlines
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Upcoming events
The LME Sales Team will attend the following events:
Details on LME events, inclding LME Week can be found here. Please contact sales@lme.com to set up a meeting at one of them.
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