London Metal Exchange

Though Dubai has started attempts to educate investors, no stock market can match the London Metal Exchange (LME) in terms of helping investors deal with futures in the materials in which it is involved. Steel and plastics are the two major materials in which the LME has started innovative training and information services. However, the roots of the LME, which stretch back to the 16th century, cover all industrial substances of strategic importance. The Exchange, which is located in Leadenhall Street, is an enduring icon of the stock market world.

LME’s initiative with respect to seminars on pricing of futures in polypropylene and linear low density polyethylene, and on their deliveries, has been widely appreciated in stock market circles. Traditional operators in futures have not been familiar with all aspects of these crucial and modern materials, and their complex inter-relationships have foxed many speculators until now. The LME’s series of training seminars on plastics helps to clear much of the fog surrounding these materials, and helps stock market veterans come up to scratch in terms of the technology and rationale of their futures.

LME’s recent interest in upgrading decision-making in steel futures is also admirable. Global demand for steel has shifted, as have the drivers of the demand and supply balance. Automobile manufacturers are amongst the most affected industries, and risks of hedging with respect to both supplies and prices, have required fresh modeling. The LME has come up with a valuable and timely service in this regard, and it is a most appropriate form of key customer service.

Though the London Metal Exchange is a very forward-looking and progressive member of the global stock market community, it makes no breaks with important traditions such as the system of Public Outcry. Traders accustomed to face-to-face dealing need not switch over to computers, though the latter option is also available. LME’s service is single-window and comprehensive in approach, covering prices, hedging, and physical deliveries. It is an essential stock market aid for enterprises which have to match risks associated with supplies and prices of critical materials.

 

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