The London Metal Exchange is proposing to close its open-outcry ring, where traders have swapped metals like copper and lead using an array of cries and hand signals for 144 years, in a bid to attract more financial players to its marketplace.
The LME temporarily closed the ring when Covid-19 ripped through the U.K. in March last year, judging the tight circle of red couches that dozens of traders crowd around to be a health risk. In a discussion paper on market structure published Tuesday, the exchange, owned by Hong Kong Exchanges & Clearing Ltd., proposed to shut it for good.
The ring began life when the LME was founded above a London hat shop in 1877, though its origins date back to sawdust circles around which merchants bought and sold metals in the early 1800s, when metals were in high demand as the industrial revolution gathered steam. It survived two world wars, the decline of the U.K. as the world’s leading industrial economy and the rise of China as the largest metals consumer.