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Factbox: History of open outcry trade, LME halts plan to close floor

06/08/2021 | 09:42am EDT

LONDON (Reuters) - The London Metal Exchange has abandoned proposals to permanently close its open outcry trading floor, saving the last such venue in Europe with plans announced on Tuesday to reopen it in September.

The world's largest marketplace for non-ferrous metals began above a London hat shop in 1877.

Following are key events in the LME's history.

JUNE 2021

The London Metal Exchange drops proposals to end open outcry trading floor but says it believes electronic trading is the future.

The floor, closed in March 2020 for the first time since World War II due to the pandemic, is due to reopen Sept 6.

JANUARY 2021

Former HKEx CEO Charles Li, instrumental in the Hong Kong's exchange's purchase of the LME, is made a honorary member of the exchange.

DECEMBER 2020

The Brexit trade deal is agreed between Britain and the European Union but does not cover the financial services sector, which includes the LME.

Whether the exchange can provide access to its systems will depend on domestic rules in each EU country.

The LME says it will forge ahead with plans to support sustainable metal production starting with the roll-out by mid-2021 of a digital register to store carbon related details of aluminium.

MARCH 2020

The LME temporarily closes its ring - the last open-outcry floor in Europe - on March 23 when the coronavirus lockdown began. It is the first time the ring has closed since World War II when the whole exchange was closed.

NOVEMBER 2019

LME decides to proceed with changes to Queue-Based Rent Capping (QBRC) - from 50 days to 80 days over a nine-month period - designed to allow warehouse companies to compete more effectively for metal.

OCTOBER 2019

The exchange announced its responsible sourcing requirements underpinned by the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance.

MAY 2019

Gay Huey Evans is elected to Chairman of the Board of LME replacing Sir Brian Bender.

JULY 2017

The LME and World Gold Council launch LMEprecious for the trading and central clearing of precious metals products.

APRIL 2017

HKEX and the London Metal Exchange (LME) announce the appointment of Matthew Chamberlain as Chief Executive of the LME

JANUARY 2017

Chief Executive Garry Jones steps down after three years at the helm.

2014

Queues to take aluminium out of storage in Detroit soar to near two years in 2014, sparking complaints from consumers in transport and packaging about artificially high aluminium prices and starting a process to change LME warehousing rules.

NOVEMBER 2014

Goldman Sachs took the lead in rejecting allegations by a U.S. Senate subcommittee that Wall Street banks were exploiting physical commodity markets to manipulate prices and gain unfair trading advantage.

A U.S. Senate report revealed the "imaginative" methods used to lure millions of tonnes of aluminium into Detroit, Metro's headquarters, and then keep it there over the past four years.

MARCH 2014

A court ruling faults the LME for failing to consult users on alternative ways to reduce vexing logjams in its warehousing network, the backbone of the world's biggest market for copper and aluminium.

JUNE 2012

Hong Kong Exchanges and Clearing Ltd agrees to pay 1.4 billion pounds ($2.2 billion at the time) to buy the LME. The deal was finalised in December.

MAY 2011

A report commissioned by the LME suggests warehouses with large stockpiles be required to deliver out much more metal each day following complaints by consumers of long delays to receive material.

JULY 2010

LME officially launches its Asia office in Singapore. This is the Exchange's first office outside of London and marks a significant milestone for the business.

AUGUST 2006

Martin Abbott appointed as new LME chief executive from October.

END 2005

Copper market in turmoil after Liu Qibing, a trader working on behalf of the Chinese government, vanishes.

JUNE 1996

Sumitomo Corp head trader Yasuo Hamanaka plunges market into crisis after losing $2.6 billion on copper over a 10-year period.

1985

Tin crisis - prices tumble after the World Tin Council's buffer stocks collapse. Contract suspended.

JULY 1914

LME closes because of fear of supply shortages at the outbreak of World War One. Reopens in autumn of same year.

1877

The London Metal Market and Exchange Company established above a hat shop in Lombard Court and trades in tin, copper and pig iron.

EARLY 19TH CENTURY

The Royal Exchange becomes so crowded, metal merchants gather at the Jerusalem coffee house on Cornhill to conduct business, where the tradition of the ring and kerb are established.

When a dealer wished to trade he would draw a ring on the floor of the coffee shop and shout "Change".

The expression kerb trade developed when the coffee houses closed at the end of the day forcing traders onto the street to trade on the kerb of the road.

1571

The Royal Exchange, the world's first commodities market, is established.

(Compiled by Pratima Desai and Eric Onstad; editing by Jason Neely)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRITISH POUND (EUR/GBP) 0.08% 0.85206 Delayed Quote.-4.64%
HONG KONG EXCHANGES AND CLEARING LIMITED 5.80% 500 End-of-day quote.17.65%
S&P 500 -0.35% 4403.78 Delayed Quote.17.16%
S&P GSCI ALUMINUM INDEX 0.21% 167.5355 Delayed Quote.31.80%
SUMITOMO CORPORATION 0.47% 1494 End-of-day quote.9.41%
THE GOLDMAN SACHS GROUP, INC. 0.21% 378.195 Delayed Quote.43.17%
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