LME under threat from breakaway markets - WSJ

LME under threat from breakaway markets - WSJ

Global mining companies are to set up electronic commodities markets in metals and minerals not offered by the London Metal Exchange, the Wall Street Journal has reported.

Executives from the UK's Anglo American, Billiton, and Rio Tinto, along with metals trader Glencore International, told the paper that they intend to build electronic markets that trade commodities ranging from base metals to coal.

Lower transaction costs and increasing price transparency are central goals. A further aim is to establish liquid derivatives in the 300 million tons a year coal market and in minerals such as manganese and chrome, the paper said.

The LME currently trades futures and options contracts in aluminium, aluminium alloy, copper, zinc, tin, nickel, lead and silver. LME shareholders recently voted for demutualisation and backed a plan to institute electronic trading at the 123-year old institution.

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