LONDON METAL EXCHANGE TRADING HOURS SESSION 1 First Session Aluminium Alloy & NASAAC to Tin to Primary Aluminium to 12.0

Size: px

Start display at page:

Download "LONDON METAL EXCHANGE TRADING HOURS SESSION 1 First Session Aluminium Alloy & NASAAC to Tin to Primary Aluminium to 12.0"

예슬 내
5 years ago
Views:

1 LME (LONDON METAL EXCHANGE) LME

2 LONDON METAL EXCHANGE TRADING HOURS SESSION 1 First Session Aluminium Alloy & NASAAC to Tin to Primary Aluminium to Copper to Lead to Zinc to Nickel to Interval to Copper to Aluminium Alloy & NASAAC to Tin to Lead to Zinc to Primary Aluminium to Nickel to Interval to Kerb Trading to Second Session Aluminium Alloy & NASAAC to Interval to Lead to Zinc to Copper to Primary Aluminium to Tin to Nickel to 15.50

3 Interval to Lead to Zinc to Copper to Primary Aluminium to Tin to Nickel to Aluminium Alloy & NASAAC to Kerb Trading to * * Note: at Aluminium Alloy and NASAAC cease trading; at Lead and Tin cease trading; at Nickel and Zinc cease trading. Prompt Dates

4 Calendar key

5 The Trading Day Trading on the LME floor is conducted by open outcry and is supported by a 24-hour inter-office market and through the LME's electronic trading platform - LME Select. A typical day for a broker member might begin at 07:00 with a team of traders and support staff operating from their offices in order to service the Far Eastern time zone. The categories of members empowered to write client contracts are able to do so at any time such activity is not restricted to the periods of floor trading. LME Ring 24 LME Select inter-office. From around (London Time) throughout the morning, traders will make markets, for the purchase and sale of metal to producers, consumers and other trading companies who are seeking to lay off risk. This is done either by telephone or e-commerce from office to office. 7,. order. At 11.45, dealing teams from the ring dealing members assemble at the Exchange and the first session of open outcry trading ("the ring") begins. Each contract trades in turn for a five-minute period. At 12.20, when all eight metal contracts have traded once, there is a ten-minute break before, starting at 12.30, each contract again trades for five minutes. The second floor trading period is, in many ways, the focal point of the day, since it gives rise to the settlement and official prices. At around 13.15, once the official pricing is complete, a period of trading known as the "kerb" begins. 11:45 Ring 1,. 5 12:20 Ring official settlement Ring 2 5. The name "kerb" is derived from the practice of members in the early part of this century to gather on the roadside after the morning session and to continue to trade. Today, this less formal trading session takes place in the ring and lasts until 15.10, during which time all eight contracts and LMEX, the index contract, trade simultaneously. Floor trading in LMEX is, in fact, only carried out during kerb sessions. It does not have its own individual five minute calls.

6 13:10~15:10 8 LMEX Kerb. Kerb20 (Kerb).LMEX, Kerb 5. < > LMEX? LME LMEX - the London Metal Exchange index - is a base metals index comprising the six primary nonferrous metals traded on the Exchange: aluminium, copper grade A, standard lead, primary nickel, tin and zinc.the index, launched on 10 April 2000, tracks the performance of the underlying metal contracts traded on the world's premier non-ferrous base metals exchange against this initial evaluation of 1000 set on 4 January LMEX futures and traded options contracts have been specifically designed to provide investors with easy access to the world's industrial metals market, without the physical delivery, storage and transaction costs associated with the underlying contracts. The morning floor trading session ends at the close of the kerb and trading moves back to the inter-office arena. However, it should be realised that inter-office trading does not cease during ring times. It is simply that the focus of trading is changed. Ring Inter-office Ring The second floor trading session begins at 15.10, and follows the structure of the first session, ending with a kerb trading period of 25 minutes from until The important difference between morning and afternoon sessions, is the fact that no official prices are announced in the afternoon. From 17.00, the market reverts to inter-office trading.

7 1.The LME is the world s largest non-ferrous metals exchange and this year celebrates its125th anniversary. 127 Its three main functions are:- 3 i. to provide a daily price for its metals which are relied upon worldwide by industry; ii. to provide futures and traded options contracts that allow for prices to be locked in (this risk management function is known as hedging); iii. and to act as a deliverer of last resort by authorising warehouses to store approved brands of metal. All contracts assume physical delivery but most are usually closed out before they become due - this being the 'insurance' aspect of LME contracts. LME 3. The use of daily "prompt dates" is an important difference between the LME and other futures exchanges. It is more commonly seen as a feature of 'over-the-counter', bilateral forward markets like the foreign exchange markets. It means that the Exchange combines the convenience, for trade users especially, of settlement dates tailored to suit individual needs with the security of a clearing house. After the 3-month date, the daily prompts for forward trading are reduced to weekly and then monthly contracts, out to 15, 27 or 63 months forward. Prompt dates() 3 LME.. 4. The daily value of contracts traded on the LME is about $10,000 million. For the third year in succession, the LME has seen record volumes with levels in 2000 up 8% on During that period, 66.4 million lots were traded which equates to an annual turnover of about $2.5 thousand billion. Volume of business has increased ten fold in the last decade. LME A report by BI (formerly British Invisibles) in June 1999 estimated that the LME was responsible for invisible earnings of about 250 million a year.

8 6. The LME trades futures and options contracts in aluminium, aluminium alloy (2 contracts), copper grade A, zinc, tin, primary nickel and standard lead. It also trades traded average price contracts (TAPOs) for aluminium and copper grade A, aluminium alloy, standard lead, primary nickel, tin and zinc. LME 7. The Exchange introduced futures and options contracts based on an index (LMEX) of its six primary metals in April 2000, designed as an investment vehicle. The LMEX contract provides one sinhle liquid reference point that tracks the performance of the world's most traded non-ferrous base metals contracts. Said The Lord Bagri, CBE, Chairman of the London Metal Exchange: "The LMEX contract provides an excellent vehicle for the fund and investment community. It gives access to our market without disruption to our core business of meeting the needs of the base metals trade and industry, which we continue to serve wholeheartedly." 8. Last year the LME launched an electronic trading system, LME Select. LME Select is a member to member trading system where LME exchange contracts are traded and matched on a principal to principal basis. The LME Select screen is accessible only to LME broker clearing members but a huge amount of information about trading on LME Select is available in real time to all market users through the 45 or so information vendors who distribute LME data. 9. LME trading is conducted on LME Select and by open outcry on the trading floor, supported by a 24-hour inter-office telephone market. The first session of open outcry (ring) begins at 11:45am where each contract trades for a five minute period. This is followed by the second ring which gives rise to the day's official prices, and then the 'kerb' when all eight contracts and LMEX trade simultaneously. The second floor trading session begins at 15:10 and follows the structure of the first session. LME 10. The Exchange is a Recognised Investment Exchange (RIE). The chairman is the Lord Bagri CBE, the chief executive is Mr Simon Heale and the executive director; regulation and compliance is a former official of Her Majesty's Treasury, Mr Alan Whiting. 11. The Exchange approves, but does not own, more than 400 warehouses in 11 countries. LME 12. More than 440 brands of metal from 65 countries are approved as good delivery against LME

9 contracts The London Metal Exchange Limited, which owns and operates the Exchange, is a wholly owned subsidiary of LME Holdings Limited. 14. Transparency of the market is very high with over 50 specific data sets issued throughout the trading day by more than 50 price vendors across the world. 15. On March 2002, the LME began trading NASAAC - its North American special aluminium alloy contract. With a modified A380.1 specification, the new aluminium alloy contract has been developed following intenstive discussions with all segments of the North American aluminium industry. It was approved in November 2001 and the first prompt date was 5 June 2002, with the first prompt month for traded options and TAPO contracts set for July.

10 Special Contract Rules 25 tonnes ( ) Major Currency The LME uses US Dollars as its major currency for each contract, the currency in which dealings on the floor are transacted and which is used for the announcement of the official prices. However, Sterling, Euro and Japanese Yen also constitute good currencies for clearing purposes for all LME metals. Therefore the LME announces the exchange rates each day that the clearing house will use for evaluating the settlement prices. LME Minimum Price Movement 50 cents per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 57 months. (A total of 63 months forward). Quality The copper grade A delivered under this contract must be electrolytic copper in the form of cathodes - grade A All copper grade A delivered must be of brands listed in the LME-approved list of copper grade A brands and must conform to BS EN 1978:1998 (cathode grade designation Cu-CATH-1). Shapes & Weights Each parcel of 25 tonnes shall lie at one warehouse and be of one brand, shape and size and shall be of full or cut plates subject to the necessity of including different shapes and sizes at the bottom of each parcel for the purpose of palletisation. Cut plates shall not be less than quarter size. Each

11 parcel of copper cathodes placed on warrant shall be delivered securely strapped in bundles not exceeding 4 tonnes and with the brand shown on the strapping. On and after 18th December 1995, each parcel of copper cathodes placed on warrant shall be securely strapped for handling and transport in bundles to permit safe handling without bundle distortion and breakage. Additionally, on and after 17th August 1999 each parcel of copper cathodes placed on warrant shall be delivered with the brand name shown on clips attached to the producer's bundle strapping or the brand name marked continuously on the producer's bundle strapping. Special Contract Rules Size of Lot 25 tonnes Minimum Price Movement 50 cents per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 21 months. (A total of 27 months forward). Quality The zinc delivered under this contract must be zinc of minimum % purity. Zinc placed on warrant on or after 1st November 2000 must conform with the % graded zinc chemical composition of the BS EN 1179:1996 Standard entitled "Zinc and Zinc Alloys - Primary Zinc". All zinc delivered must be: a) of brands in the LME-approved list of special high-grade zinc brands; b) in ingots (slabs and plates will be referred to as ingots) weighing not more than 55kgs each. Shapes & Weights Each parcel of 25 tonnes shall lie at one warehouse and be of one brand and shall consist of either slabs, plates or ingots of one size subject to the necessity of including different shapes and sizes at the bottom of each parcel for the purpose of palletisation. Each parcel placed on warrant shall

12 be delivered securely strapped in bundles not exceeding 1.5 tonnes. Additionally, on and after 18th December 1995, each parcel placed on warrant shall be securely strapped in bundles to permit safe handling without bundle distortion and breakage. Special Contract Rules Size of Lot 25 tonnes Minimum Price Movement 50 cents per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 9 months. (A total of 15 months forward). Quality The standard lead delivered under this contract must be refined pig standard lead (minimum 99.97% purity). All standard lead delivered must be: a) of brands listed in the LME-approved list of standard lead brands b) in ingots weighing not more than 55 kgs each. Shapes & Weights Each parcel of 25 tonnes shall lie at one warehouse and be of one brand and shall consist of ingots of one size, subject to the necessity of including different shapes and sizes at the bottom of each parcel for the purpose of palletisation. On and after 6th May 1992 each parcel placed on warrant shall be delivered securely strapped, in bundles not exceeding 1.5 tonnes. Each parcel placed on warrant between 1st June 1985 and 5th May 1992 shall be delivered securely strapped, in bundles not exceeding 1.2 tonnes. Additionally, on and after 16th October 1995, each parcel placed on warrant shall be securely strapped in bundles to permit safe handling without bundle distortion and breakage.

13 Special Contract Rules Size of Lot 25 tonnes Minimum Price Movement 50 cents per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 57 months. (A total of 63 months forward). Quality The aluminium deliverable under this contract shall be: a) primary high grade aluminium of minimum 99.70% purity with maximum permissible iron content 0.20% and maximum permissible silicon content 0.10%, or b) primary high grade aluminium with impurities no greater than in the registered designation P1020A in the Registration Record of Aluminum Association Designations and Chemical Composition Limits for unalloyed aluminium of the Aluminum Association Inc., U.S.A. (May 15th, 1982) c) The aluminium deliverable under this contract shall be of brands listed in the LME-approved list of aluminium brands. Shapes & Weights Aluminium delivered may be in the form of ingots, T-bars or sows. Ingots shall be securely strapped in bundles suitable for stacking. Ingot weight shall be within the permitted range 12kg to 26kg each. T-bar weight shall not exceed 5% more than 675kg each and on or after 18th January 2000, T-bar weight shall not exceed 5% more than 750kg. The weight of each sow shall not exceed 5% more than 750kg.

14 Special Contract Rules Size of Lot 6 tonnes (6) Minimum Price Movement $5 per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 21 months. (A total of 27 months forward). Quality The primary nickel delivered under this contract must be primary nickel of minimum 99.80% purity with chemical analysis conforming to the current ASTM specification. Shapes & Weights All primary nickel delivered must be: a) of the production of those producers named in the LME-approved list b) in the form of either cathodes or pellets or briquettes. In the case of cathodes deliveries shall be made in the form of sizes cut to either 100mm x 100mm (4" x 4"), 50mm x 50mm (2" x 2"), or 25mm x 25mm (1" x 1"), a) size tolerances in accordance with internationally accepted trade practice. b) sizes of full plate, excluding loops, up to 1000mm x 1300mm maximum with a thickness range of 2mm to 15mm. Each warrant of drummed or nickel cathodes shall consist of only one size.all cut nickel cathodes, pellets or briquettes delivered shall be packed in sound steel drums with a net weight of minimum 150 kgs and maximum 500 kgs. On or after 16th April 1995, all such nickel delivered for warranting shall be packed in sound steel drums with an even net weight (+/- 2% more or less) of minimum 150 kgs and maximum 500 kgs. Each warrant shall consist of drums of uniform size and weight. The gross and net weights must beclearly marked/strapped on each individual drum together with the brand name.

15 Each warrant of full plate cathodes either comprising trimmed or untrimmed cathodes shall lie at one warehouse and be of one brand, shape and size. Each bundle of full plate cathodes placed on warrant shall be securely strapped in two dimensions with corrosion resistant material to permit safe handling and transport without bundle distortion and breakage on steel or wooden skids (pallets not permitted) with ground clearance of 75mm minimum. Bundles should not exceed 1.6 tonnes in weight and with the brand name marked indelibly either a) on clips attached to the producer's bundle strapping, or b) on producer's strapping, or c) on each cathode within each bundle or d) on an indestructible tag attached to each bundle. The lot number, gross and net weights should also be either marked indelibly on a) the top cathode within each bundle or b) an indestructible tag attached to each bundle. Special Contract Rules Size of Lot 5 tonnes Minimum Price Movement $5 per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 9 months. (A total of 15 months forward). Quality The tin delivered under this contract must be refined tin of minimum 99.85% purity and conforming to BS3252:1986. Warrants issued after 16th September 1996 must conform to the chemical composition of BS EN 610:1996. All tin delivered must, therefore, be: a) of brands listed in the LME-approved list of tin brands b) either in ingots or slabs each weighing not less than 12 kgs or more than about 50 kgs.

16 Shapes & Weights Each parcel of 5 tonnes shall lie at one warehouse and be of one brand, shape and size, subject to the necessity of including different shapes and sizes at the bottom of each parcel for the purpose of palletisation. Each parcel placed on warrant shall be delivered securely strapped, in bundles not exceeding 1.2 tonnes. Additionally, on and after 18th December 1995, each parcel placed on warrant shall be securely strapped in bundles to permit safe handling without bundle distortion and breakage. Special Contract Rules Size of Lot 20 tonnes Minimum Price Movement 50 cents per tonne Delivery Dates Daily for 3 months forward, then every Wednesday for the next 3 months and then every third Wednesday of the month for the next 21 months. (A total of 27 months forward). Minimum Price Movement 50 cents per tonne Quality The aluminium alloy delivered under this contract shall be aluminium alloy conforming to one of the specifications listed below: a) A380.1 produced in conformity with The Aluminum Association Inc. specification (1989) b) 226 produced in conformity with GBD-AlSi9Cu3 as described in DIN standard 1725 (1986) c) D12S produced in conformity with JIS H , Class 12; (Note: this specification to be read in conjunction with the provision that there be an allowance as follows: Others, total 0.50% max., Al remainder) The aluminium alloy delivered under this contract shall be of brands listed in the LME-approved list of aluminium alloy brands.

17 Shapes & Weights Aluminium alloy delivered must be in ingot form and shall be securely strapped with galvanised or protectively-coated steel or polypropylene band in 500 to 1,000 kg bundles of equal weight suitable for stacking. Since 17th August 1999, one makeweight bundle in any one lot is permissible. Ingot weight shall be within the permitted range 4 to 14 kg each, with all ingots in any one lot being of the same weight and size. Ingots shall not exceed 800mm length - the only exception to be the cast feet on which bundles may be stacked. Special Contract Rules Contract Aluminium alloy conforming to the special North American A380.1 specification Size of Lot 20 tonnes (with a tolerance of +/- 2%) Minimum Price Movement 50 US cents per tonne Delivery Dates Daily from cash to 3 months (first prompt date two working days from cash). Then every Wednesday from 3 months to 6 months. Then every third Wednesday from 7 months out to 27 months forward. Shapes and Weights The aluminium delivered under this contract shall be in the form of: a) ingots in the weight range of minimum 4 kg to maximum 17.3 kg b) small sows in the weight range of minimum 408 kg to maximum 590 kg c) large sows in the weight range of minimum 567 kg to maximum 726 kg d) T-bars in the weight range of minimum 408 kg to maximum 726 kg

18 HEDGING)

19 2)

- 2 -

- 2 - - 1 - - 2 - - 3 - - 4 - - 5 - - 6 - - 7 - - 8 - - 9 - - 10 - - 11 - - 12 - - 13 - - 14 - - 15 - - 16 - - 17 - - 18 - - 19 - - 20 - - 21 - - 22 - - 23 - - 24 - - 25 - - 26 - - 27 - - 28 - - 29 - - 30 -