The London Metal Exchange has been under the buyout radar after US based Intercontinental Exchange made an unsolicited bid for the 135 year old metal exchange.
LME is valued at around £1.2 billion, it received numerous bids from the worlds leading exchanges. NYSE Euronext put forward a bid for £800 million; which was instantly rejected.
The two exchanges still in the race are ICE and HKEX. Their bids are believed to be around the £1.1 to £1.2 billion mark.
LME 3 month Coper is currently trading at $7,594.25 per tonne.
The LME offers a range of futures and options contracts for non-ferrous, minor metals and steel. The Exchange provides a transparent forum for all trading activity and as a result helps to 'discover' what the price of material will be months and years ahead. This helps the physical industry to plan forward in a world subject to often severe and rapid price movements. Such is the Liquidity at the Exchange that the prices ‘discovered’ at the LME are recognised and relied upon by industry throughout the world.
The LME is a highly liquid market and in 2011 achieved record volumes with 146.6 million lots, equivalent to $15.4 trillion annually and $61 billion on an average business day.
LME announced they were looking at setting up a China delivery point earlier this month, China is the world largest consumer of metals.
Exchange consolidation has been propping up, NYSE merger with Euronext was one of the major news over the las 5 years.
Forexmagnates team will be writing a detailed report on exchange consolidation, available in the next Q3 quarterly report.
