CRU: LME Reforms: More Evolution, Than Revolution

LONDON, September 21, 2017 /PRNewswire/ --

Following the discussion paper that was launched in April, and weeks of consultation, the LME announced its planned reforms when it set out its Strategic Pathway on Thursday 7 September.

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Many feared dramatic changes would be announced, that the days of the daily prompt system was nearing an end, and that the LME would turn itself into a US style exchange with a monthly prompt structure. Instead, the daily prompt system will remain, and the LME will optimise the way it works rather than changing fundamentally. That appears to have been the overwhelming desire of the physical users and the LME has acknowledged that.

Consulting the market
The LME first announced that it received 162 responses from its discussion paper and most of the feedback came from physical users, not LME members. There were concerns voiced that the LME would give up its daily prompt system. This system was designed for physical users, so that explains why they were so keen to respond.

The LME is suggesting no change to its daily date structure. Instead the LME said it would introduce two changes immediately:

1. A carry fee discount
2. A new over the counter (OTC) financial fee

Then it presented a series of potential strategic changes for the long run that will be subject to further discussion with members and users.

Read the full story: http://bit.ly/LME-Reforms

Read more about CRU: http://bit.ly/About_CRU

About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

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SOURCE CRU