London Metal Exchange's iconic 'Ring' may shut permanently soon

London Metal Exchange (Credits: Reuters)

The London Metal Exchange's (LME) open trading floor will soon be shut, as LME proposes to permanently close it, reported Bloomberg. One of the last of its kind, the trading floor was iconically called 'the Ring', as traders would scream through the chaos and finalize deals using arcane hand gestures.

The LME establishes the world's benchmark prices for metals including copper, aluminum, and zinc.

It closed down when the UK announced its first Covid-19 lockdown in March and since then has been operating electronically.

People have always debated about whether the Ring has outlived its usefulness. Now as operations run smoothly for the past 10 months, the argument that physical presence is the only way that prices could be established for the LME’s complex system of contracts, is quite undermined.

LME has been a historic institution for the City of London, and its closure now comes at a time of grave uncertainty for the city, as the UK exits from the European Union.

The Ring has deep roots in the physical markets, and its supporters argue that, while membership has diminished, the Ring serves the global metals industry as well today as it did in Victorian times.