In the non ferrous metals industry, prices are linked to the daily metal markets which are driven by the official prices produced each day by trading on the London Metal Exchange (LME). Whilst metal and other commodities are traded 24 hours a day on the various markets around the world, the LME sets aside a morning and an afternoon session when it trades exclusively in each of the key metals of Copper, Zinc, Tin, Nickel, Lead and Aluminiums.
These sessions last just 5 minutes each and the current eleven members trade in the 'ring' at the LME using the 'open-outcry' method where trades all go across the floor. At the end of these 5 minutes of intense trading a bell sounds and they start to trade another metal.
In the afternoon sessions the final price traded in each metal before the bell becomes the published official price until the following afternoons ring trading session.
For example Copper is traded between 12.00 - 12.05 and 12.30 - 12.35. The final price traded at 12.30 becomes the official copper price. All the metals are traded by 13.05 when the prices become available to the industry.
From these official prices, metal mixture prices can be calculated, for example 70/30 brass would be priced at 70% cash copper and 30% cash zinc price.
Because metal prices can be so volatile, it is usual in the non-ferrous industry to quote prices after around 3.00pm each day that remain valid only until around 12.00 am the next trading day.
|Daily Metal Prices|
|20 September 2017|
|Copper 3 Month||6,565||4,837|