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optimizing the operation of existing futures services in Hong Kong,
Through the network and electronicization of investment services,
incorporate cutting-edge Internet technology and design,
Allow investors to easily experience the convenient one-stop investment service.

LME Market

LME Introduction

The London Metal Exchange (LME for short, London Metal Exchange in full) is the world's largest non-ferrous metal exchange. It was established in 1876 and is an indirect wholly-owned subsidiary of the Hong Kong Stock Exchange.
The trading varieties include copper, aluminum, lead, zinc, nickel and aluminum alloys. The prices and inventory of the exchange have an important influence on the production and sales of non-ferrous metals worldwide.
The membership of LME is composed of 7 types of members, including circle members, quasi-broker clearing members, quasi-trading clearing members, quasi-broker members, quasi-trading members, individual members, and honorary members.

There are three basic trading methods in LME:

  1. The Ring, Only Category 1 Members may trade in the Ring;
  2. LMEselect, trade over the LME’s electronic trading system;
  3. Inter-office trading is conducted between Members, or between Members and their Clients, by telephone or by electronic means.

LME Products

Product Code Contract unit Minimum price volatility Transaction currency
Lead PB 25 Ton 0.5 USD/Ton=12.5 USD USD
Nickel NI 6 Ton 5 USD/Ton=30 USD USD
Copper CA 25 Ton 0.5 USD/Ton=12.5 USD USD
Aluminum AH 25 Ton 0.5 USD/Ton=12.5 USD USD
Zinc ZS 25 Ton 0.5 USD/Ton=12.5 USD USD
Tin SN 5 Ton 5 USD/Ton=25 USD USD

LME products are traded in the form of forward contracts. Different from general futures products, only one delivery date (Prompt Date) is designated every month, and LME products can be the delivery date every day. The most active contracts are 3-month products, such as 3-month copper and 3-month aluminum.
Contracts traded on the same trading day have different delivery dates. For example, the delivery date for buying 3-month copper on May 1 is August 1, while the delivery date for selling 3-month copper on May 7 is August. On the 7th, because the delivery date is different, the long and short positions traded on different trading days cannot be automatically offset and closed. To achieve the purpose of liquidation, a set of carry trades must be done to offset long and short positions with different delivery dates.

LME transaction delivery service introduction

Buy warehouse receipt process

  1. The type of metal required by the customer for enquiry, the approximate tonnage, and whether there are special requirements for the brand, warehouse location, and warehouse company.
    After we find a suitable warehouse receipt for you, we will inform Premium of the premium and discount price. If the customer is satisfied, we will reach an OTC warrant swap agreement with the partner company (the specific warrant swap operation will have our background Support completed).
  2. DAY1 customers buy cash position (notify customers of the estimated value of deposit amount)
  3. DAY2 Tom position (You need to confirm that the customer has received the full payment before 11 noon in London at the latest)
  4. DAY3 delivery day (issued official amount certificate)
  5. On the day of delivery, LME will automatically allocate delivery warrants (generally of low quality or poor geographic location of the warehouse), and our back-office department will operate to replace this warrant with the previously agreed warehouse receipt.
  6. After the replacement of the warehouse receipt, we will notify the warehouse company agent in London. They will send a letter stating the cargo holder (customer), with information including: metal type, brand, tonnage, price, warehouse company and position.
    At the same time, the customer will also receive a confirmation letter from the local company in the warehouse, and the customer can directly contact the warehouse for the next instruction.

Sell warehouse receipt process

Cash date
  1. The customer establishes a short cash position
  2. The customer contacts the warehouse company to arrange the delivery of the warehouse receipt (please note that this warehouse receipt must already be an LME warehouse receipt, otherwise the customer needs to register the warehouse receipt first)

Tom date
  1. Confirm that the warehouse receipt is received before the first round of trading in the LME circle (11:00 a.m. London time) that day, and then deliver the customer's warehouse receipt to LME to hedge the short position of the customer.
  2. If the customer’s warehouse receipt is not received by the deadline, the customer’s Tom position will be forcibly liquidated, and then no warehouse receipt will be delivered to the LME, and we will not receive warehouse receipts that exceed the specified deadline.

Delivery date
  1. LME receives the warehouse receipt and pays to the company
  2. The company pays the customer after receiving the payment, and the delivery is complete.