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Tag: lme copper

‘LME copper’ refers to copper traded on the London Metal Exchange (LME), where options and futures contracts for industrial metals are traded.

More specifically, LME copper may refer to spot copper prices or prices for futures contracts on the LME, as opposed to prices on the COMEX in New York or on the Shanghai Metal Exchange. This is an important distinction, as copper is priced by the kilogram on the LME and by the pound on the COMEX.

Futures contracts for copper delivery may be set at up to three months with daily expiration dates, or between 3 and 6 months with weekly expiration dates. There are also longer monthly contracts of up to 123 months.

Contract prices are quoted in US dollars and are sold in lots of 25 tonnes. They may be settled via physical delivery between a network of LME approved warehouses around the world.

For this reason, LME copper may also refer to inventories of copper cathode in LME warehouses. In addition to acting as a futures trading exchange and providing reference prices, the LME acts as a physical market of last resort for producers and consumers of a number of metals including copper.

In other words, those in the copper industry may sell LME copper during oversupplied markets and draw on LME inventories in the event of a copper shortage. Some market watchers look to rising and falling inventory levels on the LME as one indicator of global supply and demand conditions. However, its important to note that physical delivery is the exception rather than the norm when it comes to the metal exchange.

The LME also publishes daily reference prices for copper and other metals that are used by a number of market participants. Overall, the exchange is predominantly used to either hedge or take on price risk.

Along with tin, copper was one of the first metals to trade on the London Metal Exchange when it first opened in 1877. The exchange is now owned by Hong Kong Exchanges and Clearing, and is the last exchange in Europe to feature open-outcry trading.

What are Copper Futures?

What are Copper Futures?

Copper futures are a popular way for investors to hedge their risk while getting some experience with the red metal. Here’s how and where to trade copper futures.

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