London Metal Exchange Will Lower Fees, Settles for $10 Million With Metro

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Source: Adobe Stock/ alexlmx

The London Metal Exchange made news this week for cutting trading fees and retroactively slapping Detroit warehouse operator Metro International with a $10 million retroactive “settlement” long load-out queues that distorted prices.

LME Will Cut Trading Fees

The London Metal Exchange is expected to cut some trading fees, in a bid to arrest sliding volumes, but lower costs are unlikely to convince those already using cheaper alternatives — such as off-warrant storage — to return, metals industry sources say.

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Volumes on the 139-year-old exchange have been falling since trading fees were hiked an average 31% in January 2015. The drop has accelerated this year; in the six months to June volumes are down nearly 9% from the same period in 2015.

LME Hits Metro International $10 Million Non-Fine

Metro International Trade Services has just been hit with a $10 million “settlement” by the London Metal Exchange for its role in abetting the original load-out queue for aluminum in Detroit.

The subsequent splintering of the aluminum price between LME basis price and physical market premium caused collective outrage among manufacturers struggling to find ways to hedge the latter’s unprecedented volatility.

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Some are still pursuing Metro and its owner, Goldman Sachs, through the courts. The LME insists that the $10 million payment is not a fine but, rather, a settlement Metro agreed to in negotiations about the long load-out queues at its operation in the last three years.

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