LME (London Metal Exchange)

LCH.Clearnet Limited has provided clearing and settlement services for The London Metal Exchange (LME) since 1987.

The London Metal Exchange Company (LME) was formed in 1877 to formalise a market to sell and buy metal for a future dates through the creation of a single marketplace with recognised trading times and standard specifications for all its contracts. Over the years, the process of setting forward prices has become much more sophisticated and has been adopted by all areas of industry using futures contracts, traded options contracts and derivatives of these, to manage price risk. This is referred to as hedging and remains the principal activity on the Exchange today.

Copper and tin have been traded on the LME since its inception with new metals added over the last century and the Exchange continually responding to changes in supply and demand. Lead and zinc were officially introduced in 1920 but were traded unofficially before then. Primary aluminium was introduced in 1978, nickel in 1979 and aluminium alloy in 1992. In 2000 the LME introduced an index contract (LMEX) based on the six primary metals traded on the Exchange. The most recent metals contract to be added to the LME’s portfolio is the North American Special Aluminium Alloy Contract (NASAAC), launched in 2002. In 2005, the Exchange launched two plastics futures contracts in Polypropylene (PP) and Linear Low Density Polyethylene (LL). LMEmini contracts in copper, primary aluminium and zinc were launched in 2006.

The LME is a Recognised Investment Exchange (RIE) based in London, supervised by the Financial Services Authority (FSA).