The Contribution of the London Metal Exchange (LME) as a Base Metal Trading Platform towards Professional Marketing of Base Metals

Abstract

The production, processing, merchandising and trading of base metals is essential for most products of our daily comfort around the world. As one aspect of this chain of added value this paper covers the main aspects of the contribution of the London Metal Exchange (LME) as a commodity trading platform towards the professional and successful marketing of base metals in this industry.

The paper highlights on the transparency of pricing, timing and availability of the six basic industrial metals of copper, aluminium, nickel, lead, zinc and tin as being traded at the LME. This delivery of transparency on the level of a commodity exchange is essential for the liquidity and success of business-to-business commodity marketing efforts on the level of single commercial transactions. The knowledge of the functioning and the utilisation of the LME trading platform contribute to a lower financial risk exposure for both business-to-business partners. As a result, trust and the minimisation of financial risk make a commodity transaction simple and direct in a market often being characterised with asymmetric information. The professional business-to-business marketing of base metals is therefore ideally accompanied by a professional training to utilise the commodity trading platform of the LME.