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The London Metal Exchange:

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The Exchange will publish a new 27 month official price for Standard Lead ... Access via Global Member Firms. Tools to manage risk in volatile markets. Highly ... – PowerPoint PPT presentation

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Title: The London Metal Exchange:


1
The London Metal Exchange Global Risk management
for Non-Ferrous Metals
George Adcock Business Manager Non-Ferrous
Metals 2nd Global Capital Conference and
Exhibition 2008
2
London Metal Exchange Highlights
  • Worlds premier industrial metals and industrial
    materials market - Internationally recognised
    prices
  • Recognised Investment Exchange (RIE)
  • Established for over 131 years
  • 30 years of aluminium futures trading
  • Highly liquid contracts - 9.5 trillion turnover
    in 2007 (93 million lots 2.2bn tonnes)
  • Principal-to-Principal Market
  • Central counterparty - LCH.Clearnet

3
Production
Production figures based on annualised Jan-Jun
2008 production data provided by World Bureau of
Metal Statistics.
4
Production to trading ratio
Multiples based on trading volumes (futures,
options TAPOs) in tonnes for Jan June 2008,
divided by production over the same period
(WBMS).
5
Exchange volumes
6
LME Volume turnover - Core contracts
7
LME Volume turnover Other contracts
8
Price Volatility LME Aluminium, Copper and Zinc
(cash)
9
Prompt Date Extensions
  • High grade Primary Aluminium and Copper Grade A
    contracts from 63 months to 123 months (ten
    years)
  • Special High Grade Zinc and Primary Nickel from
    27 months to 63 months (five years)
  • Standard Lead from 15 months to 63 months (five
    years). The Exchange will publish a new 27 month
    official price for Standard Lead
  • The LME will establish and publish Closing Prices
    for the additional months

10
Aluminium 10 Year Forward Curve
11
Zinc 5 Year Forward Curve
12
Aluminium and Copper Futures
13
Global Delivery Locations LME Approved
EUROPE 16 Locations
NORTH AMERICA 10 Locations
ASIA - 8 Locations
MIDDLE EAST 1 Location
14
Exchange Developments 2008/2009
  • Steel billet contracts launched H1 2008
    successfully trading on the Ring, LMESelect and
    the telephone market
  • Molybdenum and Cobalt H2 2009

15
Summary
  • 90 of non-ferrous metals traded on the LME
  • 9.5 trillion turnover in 2007
  • Access via Global Member Firms
  • Tools to manage risk in volatile markets
  • Highly liquid contracts
  • Credibility
  • Established
  • Global Price Determined

16
Disclaimer
George Adcock Business Manager Non-Ferrous
Metals T 44 207 264 5695 E george.adcock_at_lme.c
om
The information contained within this
presentation is for illustrative and educational
purposes only and should not be relied upon in
making any investment decision. Whilst every
effort has been made to ensure the information is
up-to-date and correct, the LME cannot guarantee
that it is completely accurate and free from
human error.
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