HKEX-owned LME plans new metals contracts using Shanghai Futures Exchange prices: sources
- Collaboration between the LME and the Shanghai Futures Exchange was mentioned briefly by LME’s CEO Matthew Chamberlain in October
- Known as cross-listing, the process would involve new LME metal contracts settling against ShFE prices, the sources said
The London Metal Exchange (LME) is planning to launch new metals contracts using prices from the Shanghai Futures Exchange (ShFE), three industry sources familiar with the matter said, further increasing China’s influence on global metals markets.
Collaboration between the 146-year-old LME and ShFE was mentioned briefly by LME’s CEO Matthew Chamberlain in October at the annual LME Week dinner, without any detail.
Two years ago the idea of China allowing an overseas exchange to use domestic prices would have been met with reluctance, but since then there has been a sea-change in strategic direction at Chinese exchanges, the sources said.
The change has come due to pressure on Chinese exchanges from the government to innovate and expand their influence to the rest of the world and China’s aim of domestic players having more control over commodity prices.
Known as cross-listing, the process would involve new LME metal contracts settling against ShFE prices, the sources said. The sources did not have a timeline for the launch.
The LME, the world’s oldest and largest forum for metals trading, would pay ShFE a licence fee and the new contracts would be cleared at the LME’s clearing house, the sources said.
