LME

The London Metal Exchange (LME) is a global marketplace for trading and clearing futures and options on base metals. Based in London, England, it serves as a leading venue for price discovery, risk management, and physical delivery of metal. The LME operates as a subsidiary of Hong Kong Exchanges and Clearing (HKEX) and maintains a worldwide network of participants, warehouses, and clearing services.

The LME traces its origins to 1877 and has long been a benchmark for the pricing of industrial metals. It grew from merchant-led price quoting to a formal exchange with standardized contracts and regulated trading. In 2012, the LME was acquired by HKEX, reinforcing its role in the global metals market and enabling a broader set of clearing and settlement services.

Trading and products on the LME focus on six primary base metals: copper, aluminium, lead, zinc, nickel, and tin. Contracts are typically standardized by metal type, delivery location, and maturity, with both futures and options available. Most contracts are settled by physical delivery from a network of approved warehouses, though some products may be cash-settled. Trading occurs on LMEselect, the exchange’s electronic platform, while open-outcry trading in the Ring remains part of its history and practice in certain circumstances.

Clearing services are provided by LME Clear, the exchange’s central counterparty clearing house, which manages risk and settlement for trades. The LME also publishes price benchmarks and official price series used by industry participants for settlement, hedging, and financial reporting.

The LME plays a central role in global metals markets, affecting producers, processors, traders, and users worldwide. It serves as a key reference point for price formation and the effective management of metal risk.