JPMorgan Abandons Floor Trading at the London Metal Exchange

Posted by Anton Murray Consulting on 10 Sep, 2015

Eddie Van Der Walt and Javier Blas

JPMorgan Chase & Co. will leave the floor of the London Metal Exchange, the last open outcry trading in Europe, as clients move to electronic trading.

That leaves nine firms, including Societe Generale SA, Sucden Financial Ltd. and INTL FCStone Inc., whose traders meet daily at a ring of red leather sofas at the exchange and shout buy and sell orders for metals, a tradition dating back to 1877. JPMorgan startedLME floor trading after buying RBS Sempra Commodities LLP in 2010.

“It’s always shocking when a floor trader leaves, though not wholly unexpected given the current business environment,” Robin Bhar, an analyst at Societe Generale SA which owns category one dealing firm Societe Generale Newedge UK Ltd in London, said by phone. “This is not an existential threat to the ring. We may well see a Chinese or wider Asian firm taking their place.”

LME, which was bought by Hong Kong Exchanges & Clearing Ltd. in 2012, has sought to preserve open outcry trading since the takeover and made a place for the ring at its new offices. The LME is the biggest metals exchange, with about 82 percent of the world’s nonferrous metals business transacting on its platforms.

Suits, Ties

The exchange has strict rules for the traders who must wear suits, ties and dark shoes. It also records sessions with microphones and video cameras to capture traders barking at one another. Dealers have been fined or suspended for standing up during a session.

The decline in LME members poses a risk to liquidity on the exchange, according toStephen Briggs, an analyst at BNP Paribas SA in London. He said historically there have been 10 to 12 members.

JPMorgan said trading won’t be affected and the bank will continue to facilitate transactions. The bank was previously listed as a Category 1 member and will change to Category 2 immediately, according to the statement. The decision ends a tradition of membership that passed from Metallgesellschaft, the German conglomerate that was one of the largest metals traders of the past century, to Enron Corp. and Sempra.

“Our client preferences have shifted and a very high percentage of our LME contract volumes are now traded electronically,” Michael Camacho, head of commodities at JPMorgan, said in a statement.
Bloomberg

Latest market insights

Perpetual executive steps down

› Read more

CFS Super CEO joins FSC board

› Read more

AMP appoints new CFO, announces ‘simplified structure’

› Read more

Super funds look offshore as local opportunities wane

› Read more

BlackRock pivots to private credit ahead of potential ‘boom’

› Read more

Twitter feed


Warning: Undefined array key 0 in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CtfFeed.php on line 1924

Warning: Undefined array key 0 in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/templates/item.php on line 12

Warning: Undefined array key 0 in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Display_Elements.php on line 22

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 31

Warning: Undefined array key 0 in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/templates/item.php on line 18

Warning: Undefined array key 0 in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/templates/item.php on line 19

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 58

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 58

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 27

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 136

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 136

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 145

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 154

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 154

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 145


Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 31

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 67

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 489

Warning: Trying to access array offset on value of type null in /home/antonmurray/public_html/wp-content/plugins/custom-twitter-feeds/inc/CTF_Parse.php on line 497

Sign up to our newsletter

Sign up to our newsletter

"*" indicates required fields

By subscribing to our newsletter I agree to the collection, use and disclosure of my personal information in accordance with our Privacy Policy