London Metal Exchange moves open outcry trading floor

LONDON (Reuters) - The 139-year-old London Metal Exchange (LME) will wrap up open outcry trading on Wednesday at its red leather “ring” before moving the trading floor to a new home elsewhere in the capital’s financial district.

Men walk past the London Metal Exchange (LME) in London, July 22, 2011. REUTERS/Paul Hackett

The LME, the world’s biggest market for base metals such as copper and aluminum, is the only financial exchange to maintain open outcry trading in Europe.

The exchange is moving offices to consolidate all its functions in the new location - Finsbury Square.

The trading floor that hosts suited figures yelling and waving within a circle of red-leather benches has been located for over two decades at Leadenhall Street, also in the City of London financial district.

The LME, owned by Hong Kong Exchanges and Clearing Ltd, has declined to describe the design of the new open outcry floor, which will go live on Monday, except to say there will be new electronic screens with more price displays.

During the transition, trading will take place on Thursday and Friday at the LME’s disaster recovery site in Chelmsford, east of London.

While most other financial exchanges have abandoned open outcry trading, the LME has committed itself to the practice, announcing plans in 2014 to invest 1 million pounds in technology for the “ring”, where deals are struck in intense five-minute bursts of yelling and arcane hand signals.

Ring trading members of the LME have steadily declined over the years, with U.S. bank JP Morgan the latest to quit open outcry trading in September.

That move left nine firms trading in the ring, down from a peak of about 30 during the late 1980s.

The ring has its roots in the early 19th century when the Royal Exchange, the world’s first commodities market, became so crowded that metal merchants gathered at the Jerusalem coffee house on Cornhill in the City of London to conduct business.

Reporting by Eric Onstad; editing by Adrian Croft