LME eyes switching to electronic trade in face of coronavirus

The London Metal Exchange's open-outcry Ring will remain open for business in the face of the continued coronavirus spread, however if needed will be switched to electronic price discovery, a spokesperson told S&P Global Platts Thursday.

The LME website explains that each LME metal is traded in "highly liquid five-minute Ring sessions which are themselves representative of global supply and demand."

The world was faced with more financial chaos Thursday, as the corona virus pandemic continued to send investors running for cover, with bellwether copper dropping in lockstep with global equity markets.

Copper was spot bid on the LMEselect electronic platform $102.50 lower at $5,407/mt, as of 1110 GMT. The session low is currently pegged at $5,405/mt, with a high of $5,484/mt registered earlier in the session.

"The LME has robust business continuity procedures in place designed to deal with a wide variety of potential developments. We are currently taking all necessary precautionary steps with regard to the continued spread to ensure the protection of all staff," the spokesperson said.

"The Ring continues to function from London. Contingency plans are dependent on exact circumstances but could include the relocation of the Ring to our recovery site in Chelmsford or, if necessary, switching from Ring-based to electronic price discovery," the spokesperson added.

Earlier in the session the world's largest futures exchange, CME, said it would halt floor trading at its Chicago hub at the close of play Friday as a precautionary measure in the face of coronavirus and its continued global spread.

A trader said that this could be the "nail in the coffin" for open-outcry trading. Most products are now traded on electronic screens and there is often debate around the need for open-outcry. "COVID-19 is having so many unexpected consequences, it's getting really bad out there," he said.

The CME said that so far no COVID-19 cases have been reported on the trading floor or in the Chicago Board of Trade building.