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| Commodity News |
| HeadLine : |
As metal trade shrinks, exchanges fight back with new products |
| Date : |
Jan 13 2020 |
The London Metal Exchange’s (LME) copper contract saw activity fall by 8% last year. The declines were more pronounced on both the CME and Shanghai Futures Exchanges (ShFE) contracts with volumes slumping by 25% and 29% respectively.Only nickel bucked the broader trend thanks to heightened price volatility and the metal’s electric vehicle credentials. Trading volumes rose by 3% in London and by 40% in Shanghai, where nickel has also assumed the role of junior partner in a proxy trade with the much larger iron ore market. It was a year to forget for many of the base metals with copper, aluminium, zinc and lead closing out 2019 little changed from year-start levels. Total volumes on the London market, which still dominates physical pricing, fell by 4.6% last year after a similar-sized rise in 2018. CME zinc stocks have shrunk to just 6 tonnes and the contract, which didn’t trade in the second half of the year, looks perilously close to following the CME lead contract into oblivion.
Volumes in the CME’s copper options contract doubled year-on-year and the exchange’s weekly options contracts, launched in 2018, steadily gained traction over the course of 2019. The LME’s scrap and rebar contracts have traded since the start of 2018 and are seeing respectable activity. Two new contracts, covering hot rolled coil (HRC) in China and North America, have seen volumes build since trading started in March last year. The former set a new monthly volume record of 16,297 lots in December, bringing the 2019 total to 45,884 lots. CME volumes grew by 89% in 2018 and by another 45% last year, when the equivalent of almost 3.5 million tonnes traded. CME alumina volumes fell by 79% last year to 118,200 tonnes, while the LME’s new alumina contract notched up trades of just 46,000 tonnes.Alumina was one of five metallic offerings launched last year. The others are copper cathode, copper rod, aluminium ingot and aluminium billet.
Source : Mining
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