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The London Metal Market and Exchange Company was founded in 1877, but the market traces its origins back to 1571 and the opening of the Royal Exchange. At first, only copper was traded, lead and zinc were soon added but only gained official trading status in 1920. The exchange was closed over WW II and did not re-open until 1952.[citation needed] Other metals traded extended to include aluminium (1978), nickel (1979), aluminium alloy (1992) and steel (2008). The exchange also started trading plastics in 2005. The total value of the trade is around $US 10.24 Trillion annually.

If you want to produce, or trade copper or tin, or whatever listed on the LME, you can sell the metal to one of the many big warehouses of the LME, all over the world, and receive a warrant. This is a way to share the cost of these warehouses between the many industry participants and make it more efficient, to compete against other products.

The LME issues, each day, detailed figures on how many tons of each metal is in its warehouses, which helps producers and consumers make correct business decisions.

Ring Trading
Trading Times: 11:45 - 17:00, London Time
Open-outcry is the oldest and most popular way of trading on the Exchange. It is central to the process of ‘price discovery’, a term used to describe the way LME official prices are established. Prices are derived from the most liquid periods of trading; the short open-outcry ‘ring’ trading sessions, and are most representative of industry supply and demand. The official settlement price, on which contracts are settled, is determined by the last offer price before the bell is sounded to mark the end of the official ring.
Ring Dealing Members are entitled to trade in the Ring during the ring-trading sessions. They may also operate a 24-hour market by trading inter-office. All Ring Dealing Members, as members of the London Clearing House, are authorised under the 2000 Financial Services and Markets Act, and are regulated by the Financial Services Authority.

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LME Copper

There is constant inter-office trading, but a lot of trading is still done by open-outcry in the Ring. There is a morning and an afternoon trade, where each of the eight metal contracts are traded in two blocks with a five-minute session for each contract (the sessions last from 11.45 until 13.15 and from 15.10 until 16.35, each session includes a 10-minute break). The second trading block in the morning is key to setting the Daily Official Exchange rates. After the official trades, there is 15 minutes of "kerb" trading. Trades are in futures, options and TAPOs (traded average-price options, a form of Asian option).
In addition to the 12 companies who have exclusive rights to trade in the Ring, around 100 companies are involved in the LME in total.
Contrary to popular belief, the precious metals, gold and silver, are not traded on the London Metal Exchange, but on the over-the-counter market usually referred to as the London Bullion Market, by the members of the London Bullion Market Association. Platinum and palladium are traded on the London Platinum and Palladium Market. Minor metals are not yet traded on the LME but the exchange announced that they will begin trading Cobalt and Molybdenum. Many companies involved in minor metals are members of the Minor Metal Trade Association.

Electronic Trading
The LME finally launched an electronic platform called LME Select. This was developed by a Swedish software house called Cinnober. The platform is a FIX-based trading platform, and has a significant and increasing share of the total LME business.

LME Historical and Daily Official Copper Prices

Price / Metric Tonne (MT)

Date	Cash ($)	3 mths ($)	Inventory
2019-12-06	5867.50	5900.00	193800
2019-12-05	5855.00	5885.00	198425
2019-12-04	5823.00	5850.00	202950
2019-12-03	5812.00	5835.00	206250
2019-12-02	5855.50	5877.00	208525

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