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UPDATE 2-Hunt for London Metal Exchange chairman underway
February 5, 2010 / 11:11 AM / 8 years ago

UPDATE 2-Hunt for London Metal Exchange chairman underway

* Brydon presided over significant volume growth

* New chairman needs to be independent

* China poses a challenge for LME

By Pratima Desai

LONDON, Feb 5 (Reuters) - London Metal Exchange Chairman Donald Brydon is leaving and the hunt is on for a successor capable of guiding the exchange through a turbulent global economy and changing political landscape.

Managing changes in regulation, which may not be as friendly as in the past, will also be part of the brief.

“Challenges are many, there are questions about economic and financial stability ... new regulation to stop speculators should be a given,” a senior metals industry source said.

“The LME isn’t in the direct line of regulatory fire, but the law of unintended consequences stands.”

The source was referring to plans by U.S. President Barack Obama to restructure banks, which could be adopted in some form by other major economies. [ID:nLDE6130RQ]

The global economy is standing at a point where many think a double-dip recession could be on the cards. Weak growth in turn is often a trigger for social unrest in many parts of the world.

Strong economic and demand growth in China will help support volumes on the exchange. [ID:nTOE6130AF]

But China, which accounts for more than 30 percent of global copper demand, cannot completely offset falls in other major economies such as the United States, Japan and Germany.

However, the country poses another challenge for the exchange: How to take advantage of phenomenal growth in the Asian region. As a first step the exchange is planning to open a office in Singapore.

“China will protect its territory fiercely, it’s not going to be easy,” the source said.

SIGNIFICANT GROWTH

Brydon was appointed chairman in September 2003 and since then has presided over a capital restructuring, the first dividend payment and a significant growth in traded volumes, the exchange said in a release.

Total trading volumes at the London Metal Exchange edged down 1 percent in 2009 to more than 112 million lots, equivalent to 2.57 billion tonnes. [ID:nWLA2232]

“A search is under way for his successor,” the LME said. “The LME’s Nomination Committee is responsible for identifying a successor and has been working on this for some time. We will update the market in due course.”

Brydon is leaving to focus on his role as chairman at UK-based engineering firm Smiths Group (SMIN.L) and Britain’s Royal Mail, which recently lost its chief executive to British Broadcaster ITV (ITV.L).

“Brydon has to find a new CEO for the Royal Mail, that is his main job now,” another senior metals source said.

“The new chairman is unlikely to be from the (metals) industry because that could create conflicts of interest, it should be somebody completely independent.”

One suggestion was a British politician, possibly from the Conservative benches, given the high probability of the government losing its majority in an election, which must be called by June. (Additional reporting by Michael Taylor; editing by Sue Thomas)

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