The London Metal Exchange’s open-outcry trading ring is set to reopen in September, in a reversal of plans announced earlier this year, but will still press ahead with digital trading.
The trading ring, with its distinctive red circular sofa, was closed in March 2020 for the first time since the Second World War due to the pandemic and social distancing restrictions.
In January it launched a consultation process on closing the iconic trading floor, the last in Europe, arguing digital trading was the future. Around $50bn of metal trades are made on the LME every day.
The bourse said it was the “right time to consider the permanent closure of the Ring and a move to an electronic pricing structure”. At the time, LME added that such a step would benefit the market by increasing the market and improving transparency.
Today the London Metal Exchange said, subject to consultation, it will reopen the ring for trading from 6 September. This would give adequate time to “ensure vaccine efficacy, even though recommended workplace social distancing could remain in force.”
“The Board believes that the pathway laid out fully respects the interests of the physical participants who sit at the heart of our ecosystem and achieves the right balance between fairness, choice, efficiency, and progression,” chairman Gay Huey Evans OBE said.
There remains a strong preference for digital trading so the exchange has concluded closing prices should be determined electronically, as has been the case since the start of the pandemic.
In March the exchange said it would change its electronic closing price system to make it more efficient as part of a separate consultation.
Plans to improve the market’s electronic trading system were in place long before January’s proposals to shut Europe’s last open-outcry trading floor on a permanent basis.