Tag: open outcry trading

Hot-Rolled Flat Steel Tariffs Upheld by ITC; LME Volumes Down Due to Office Delay

Hot-Rolled Flat Steel Tariffs Upheld by ITC; LME Volumes Down Due to Office Delay

U.S. Steel companies applauded as tariffs were upheld on hot-rolled steel flat products and the London Metal Exchange took a hit when it had to move its open-outcry trading to another location when its new office wasn’t ready this summer.

ITC Upholds Hot-Rolled Steel Tariffs

The U.S. International Trade Commission handed another victory to American steelmakers on Monday, affirming most of the recent anti-dumping and anti-subsidy duties on hot-rolled flat steel imports from Australia, Brazil, Britain, Japan, the Netherlands, South Korea and Turkey.

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The commission rejected anti-subsidy duties of about 6% against hot-rolled steel from Turkey, but affirmed anti-dumping duties of about 6 to 7% against Turkish-made hot-rolled steel. The rest were all upheld.

LME Trading Move Hit Volumes Hard by Move

The temporary relocation of open outcry trading at the London Metal Exchange (LME) to a disaster recovery site due to problems at its new offices hit volumes hard during the already quiet summer months, brokering sources said.

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For all contracts traded on the LME, volumes fell more than 9% year-on-year in August to 12.18 million lots, after a drop of nearly 18% in July. Volumes for aluminum and copper fell nearly 22% and seven percent respectively in August from the same period a year ago.

JP Morgan Chase Will Stop Open Outcry Ring Trading On The LME

JPMorgan Chase is quitting open outcry trading on the London Metal Exchange after reducing its commodity business.

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The move will reduce the number of financial institutions trading in the LME “ring” to 9, including Societe Generale SA, Sucden Financial Ltd. and INTL FCStone Inc.

[caption id="attachment_53605" align="aligncenter" width="500"]Traders in London Ring trading on the London Metal Exchange suffered a blow when JP Morgan Chase opted out of it this week.[/caption]

It is the latest move, announced by the LME on Monday, to raise questions about the future of open outcry trading on the LME after most other markets have shifted to all-electronic formats.

The LME is the only exchange in Europe continuing the open outcry practice. During the rings on the LME trading floor, a circle of padded red-leather seats, traders use hand signals during bursts of intense trading in copper, aluminum, lead, nickel and zinc.

The LME is the world’s oldest and largest market for industrial metals trading and it reaffirmed its commitment to open outcry rings in June, saying it would invest 1 million pounds in technology. At the time, it hoped to attract more ring-dealing members.

But on Monday the LME said in a members’ notice that JP Morgan Securities would change as of Tuesday from Category 1 to Category 2 membership, which allows electronic and telephone trading, but not ring dealing.

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The decline in LME members poses a risk to liquidity on the exchange, Stephen Briggs, an analyst at BNP Paribas SA in London, told Bloomberg News. Historically the ring has previously had 10 to 12 members.

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