Asian trading of the London Metal Exchange’s benchmark three-month contracts increased last year, making up 14 percent of total volume on the Select electronic system, according to Liz Milan, managing director for LME Asia. This compares with about 9 percent to 10 percent in 2009, Milan said in an interview in Singapore today, referring to transactions between 1 a.m. and 7 a.m. London time. “Business in Asia is moving very quickly, we can’t underestimate the growth in Asia,” she said. “The atmosphere in the market here is more positive than in Europe and we’d be happy to see continued growth.”
Total trading on the exchange in 2010 rose 7.4 percent from a year ago to a record 120.3 million lots. This is equivalent to 2.83 billion metric tons of material worth about $11.6 trillion, the exchange said in a Jan. 6 statement. The exchange will launch Asian benchmark prices for copper, aluminum and zinc on Jan. 24, Milan said. These are unofficial, non-deliverable prices which LME members may choose to use as a reference rate against closing prices on the Shanghai Futures Exchange for arbitrage trades, she said.
As volumes in Asia grow, the LME is planning to expand its office in Singapore to include backup staff, which means members will no longer have to call the exchange’s help desk in London for technical assistance, Milan said. This should be in place by the end of the first quarter, she said.
Milan, who started the Singapore office in April, hopes to “re-engage” with China, the largest metals user, this year. “We’ve always been in touch with people in China but it’s hard to have regular, consistent contact from London,” she said. The exchange does not have plans to launch yuan-denominated contracts or explore warehousing in China for now, she added.