Electronics therefore represents the absolute weapon

The London Metal Exchange (LME) is not a besieged fortress. Time worked well for him. Born in 1877, full industrial revolution to the United Kingdom, the London market of non-ferrous metals enjoys an enviable situation in its niche. "Approximately 98 of global liquidity invested on aluminum and 95 of the copper are placed on the LME", highlights Anna Campopiano, Member of the Executive Committee of the stock market. Mean that the LME is not the Nymex, attacked from front on its flagship of the crude oil WTI contract by the very dynamic IntercontinentalExchange (ICE).

However, undertaking market will not remain passive the next competitive challenges. It is likely that the Nymex starts as early as November rating of small contracts (so-called mini-contrats) on the most liquid base metals, aluminum and copper. This is why the LME took the lead by proposing in turn, as early as November 20, of the mini-contrats on these non-ferrous two which complements that of zinc. "If we had not done so, someone else would have him fact", explained Martin Abbott, new Executive Chairman of the LME, the annual seminar of the market which is held Monday in London.

However, tremendous liquidity, derivatives of smaller contributors must be accessible to the largest number of investors to deliver all their potential. Electronics therefore represents the absolute weapon. But a good technology is not enough. Must be computer platform or to property link brokers and customers in the market. For the moment, that of the LME, called Select, is accessible only to about a demi-millier of users. A very modest figure of Globex, the electronic trading platform of the Chicago Mercantile Exchange (CME) to which the Nymex now brings its energy contracts and, soon, those of base metals.

Members and customers

The LME intends to share its computer Exchange not only with its members but also with customers of the latter. To date, only 11 first level members are entitled to sit on the Recycle Bin. They were almost 40 thirty-five years ago. On the other hand, members of second level those allowed to treat and compensate their orders and the orders of their customers by telephone or by LME Select are more numerous (26 today). In their vast majority, it is the largest banks of World Affairs, the largest providers in volume.

The growing "financialization" of the market prompted its direction to expand its offer of risk management products. The range of long and flat steel products will be released sometime in 2007. Received rather coldly by the steel industry, the news of the rating of steel is nevertheless its way. The first battle, the presentation of credible Awards, seems already and already won. The LME supports this on Platts deemed society book average courses solely based on actual transactions.

The LME is distinguished by its choice to propose future contracts on a newly created OTC market. "It will be a cleared OTC Over The Counter, Editor's note electronic market," said Anna Campopiano. This type of approach has two major advantages: firstly, it requires no underlying official filed in the warehouses of the LME. On the other hand, it does not risk offending producers and consumers more attached to the principle of direct negotiations.

Finally, with respect to the rumours of a merger with the CBoT or a possible introduction in the stock market, Anna Campopiano ensures that his company "is not for sale" and that it "focuses on organic growth." Moreover, she points out, hedge funds have not shown the appetite for the acquisition of shares in the LME.

However, there is a growing interest in the acquisition of bargaining rights pure and simple, complete. Non-private company since January 2000, the LME was created in May 2006, to maximize its valorization, a new class of B shares which are not property on the business of market rights, but that allow to negotiate on the stock exchange.