LME sets strict anti-pandemic measures for Sept. 6 Ring reopening

The London Metal Exchange has set out various measures to minimize the spread of COVID-19 among Category 1 Member personnel and others that will access its Ring area when it reopens on Sept. 6.

"Due to the unique nature of open outcry trading and the fact that there are certain measures that cannot be put in place, the Ring area is considered to be a higher-risk environment," the LME said in a note to members.

Traditional Ring trading, a mainstay of the 144-year old exchange, was suspended March 2020 due to the pandemic. Although metals prices have since then been set via the LMEselect electronic trading platform, considered a more transparent way to set prices, the LME announced in June that it would bring back Ring trading due to demand by the majority of its members and other stakeholders.

Official lunchtime prices are now to be set in the Ring, in traditional style, while afternoon closing prices will be set electronically via LMEselect.

The measures to be adopted include temperature checking on entry to Ring area, restricted access, use of visors by market operations teams and masks by other LME personnel, sanitizers, deep cleaning, one-way system and additional ventilation.

The LME will also require Category 1 (Ring-dealing) members to check their COVID-19 vaccination and testing status among staff.

Pricing may however occur only electronically if there is insufficient interest in participating in Ring trading, LME said in its Sept. 1 note.

"Where there are (or is likely to be) five or fewer Category 1 Member firms represented on the Ring, the LME may in its absolute discretion temporarily move to electronic determination of the Official Prices as per the LME's electronic business continuity methodology, until the LME can confirm that a minimum of five Category 1 Member firms have personnel available to trade on the Ring," LME said.

The LME previously said it expected nine Category 1 members to come back to Ring trading this month.

"While temporarily moving Official Price discovery from the Ring to LMEselect would not necessitate the closure of the Ring, it is likely that trading in the Ring would also need to be temporarily suspended in order to further reduce the risks associated with the transmission of COVID-19 and to ease operational demands on Category 1 Members and LME staff," the note to members continued.

In any event, any suspension of trading on the Ring would be temporary and any temporary absences of Category 1 Member firm personnel due to COVID-19 would not constitute a lack of support for the determination of Official Prices in the Ring, LME clarified.

The electronic determination of market closing prices enhances participation and transparency, supporting financial customers and larger physical users, LME CEO Matthew Chamberlain said in a presentation to reporters on June 8. Electronic liquidity enhancement plans will be optimized and commence in 2022, he said.

The LME said it will continue to monitor government guidance to ensure that it is implementing appropriate measures to mitigate against the risks associated with COVID-19.