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The London Metal Exchange is on the verge of proposing to permanently shut down its Ring, where metals have been traded since its founding in 1877, a move that would mark the end of in-person commodity trading in Europe.
The stock exchange’s decision, which a person familiar with the matter said would be officially announced later on Tuesday, comes after the Ring was temporarily halted last year due to the pandemic.
Traders trade copper at the LME in 1966
The Ring is known for its well-fitting men and strict rules of dress code and conduct
If LME members accept its closure, it would mark the end of an era for the Hong Kong stock exchanges and the clearing exchange. The Red Ring Sofa is the last open trading place in Europe and began when metal merchants drew a circle on the sawdust floor of a City of London cafe in the 19th century.
Tuesday’s LME move is also a belated acceptance of the dominance of e-commerce that has led many futures exchanges to shut down over the past decade. The last New York Mercantile Exchange traders left in 2016.
The LME Ring is known for its dressed men and strict rules of dress code and conduct, failure to follow which could result in fines. The prices set by the Ring are used as the official daily price of the LME, which is essential for buyers and sellers around the world.
The LME is unique among exchanges by allowing its users to hedge metal prices for specific days in the future, rather than in standard three-month increments like in most futures exchanges. It has previously been argued that human traders on the Ring are in the best position to execute these complicated transactions.
Buying and Selling Metals in 2003 © Bloomberg
Traders on their phones in May 2016 © Bloomberg
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