London Metal Exchange to close historic trading ring

The City of London's last-remaining open outcry trading ring is to be consigned to history by the London Metal Exchange (LME) as part of a review aimed at modernising one of the world's most important commodity trading hubs.

Sky News has learnt that the LME is expected to propose the end of its open outcry structure in a consultation document to be published later on Tuesday.

It will be regarded as a historic moment for one of the most identifiable practices in the City of London, and is likely to meet stiff resistance from some LME brokers.

The LME Ring underpins roughly US$50 billion of metal trades every day, and has been operational since the 1800s, surviving two world wars in the process.

It has, however, been temporarily shut as a result of the coronavirus pandemic, and had not been scheduled to resume trading until social distancing protocols had been abandoned.

Market insiders said the permanent closure would be proposed within the context of a wider market consultation aimed at modernising the LME in line with exchanges in other asset classes, such as shares, where electronic trading has become the norm.

One feature of the consultation would be to examine whether a regulatory information service similar to that used by the London Stock Exchange should be deployed for metals trading, one source said.-Photo: Sky News