The London Metal Exchange (LME) has confirmed that it intends to reopen the Ring for trading on 6 September 2021, by which date the LME expects its COVID-19 criteria for reopening will have been met.
In March 2020, in response to the global pandemic, the LME took the decision to suspend Ring trading temporarily. This decision took into account relevant advice from the UK Government, with the key objective of protecting the health and safety of LME staff and the staff of Category 1 members, and preventing the spread of COVID-19.
The LME stated that in order for it to prepare to reopen the Ring it would require either: (a) an end (or significant further relaxation) to social distancing, per UK Government guidance – which likely would itself be driven by a significant reduction in virus transmission; or (b) a widely available vaccine; or (c) some other (as yet unknown) technological solution which would make renewed Ring trading safe.
Additionally, the LME stated that it would require that a meaningful number of Category 1 members to be willing to return, and those members would need to collectively represent more than 60% of the total 2019 Ring-traded volume. This criteria ensures that price discovery in the Ring would be based on meaningful volume, so that the prices continue to be credible and robust.
The soonest that the LME’s social distancing criteria could be met would be late June 2021, being the earliest point at which the UK Government has indicated that it may lift legal limits on social contact. However, this would require the Government to announce that it intends to lift social distancing guidance at the same time as removing legal limits, and given recent developments in respect of the spread of new COVID-19 variants, the lifting of social distancing restrictions at the end of June remains uncertain.
Given the current vaccine rollout progress, the LME believes it is now appropriate to confirm its intention to reopen the Ring on 6 September 2021. This date has been chosen to provide certainty and allow forward planning, on the basis that the LME’s existing vaccine criteria is expected to have been met, with adequate time allowed to ensure vaccine efficacy, even though recommended workplace social distancing could remain in force.