What is LME & how does it work?

It is the largest exchange for options and futures contracts for base metals, which include aluminum, zinc, lead, copper, and nickel. The exchange also facilitates trading of precious metals like gold and silver. The LME is located in London, England, but has been owned by Hong Kong Exchanges and Clearing since 2012.

What is the London Metal Exchange (LME)?

The London Metal Exchange (LME) is a commodities exchange that deals in metals futures and options. It is the largest exchange for options and futures contracts for base metals, which include aluminum, zinc, lead, copper, and nickel. The exchange also facilitates trading of precious metals like gold and silver.

Can metal be delivered against an LME contract?

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.

Why should you list your metals on the LME?

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.