By Eric Onstad
LONDON (Reuters) -Sigma Broking Ltd became the first new ring trading member of the London Metal Exchange in 15 years on Wednesday amid doubts about the future of the ring and as the exchange seeks to bolster flagging volumes.
The LME, the world’s oldest and largest market for industrial metals, said in a notice that it had approved Category 1 membership for Sigma.
Sigma, which trades equity, fixed income and commodities, joins eight other banks and brokers that trade on the last open-outcry trading floor in Europe.
The LME, owned by Hong Kong Exchanges and Clearing Ltd., reopened its ring on Sept. 6 last year using a hybrid model after a closure due to the COVID-19 pandemic.
Triland Metals, however, ended nearly half a century on the LME floor due to the “reduced responsibility of the ring”.
In the new system, official or settlement prices are set in open outcry, but closing prices have switched to the electronic system, which some ring members say will slash their profits.
Sigma’s membership marks the first new ring membership on the LME since EDF & Man joined in 2007, excluding companies that have taken over existing ring members.
In the ring, a circle of padded red-leather seats, traders use arcane hand signals during five-minute bursts of intense trading in copper, aluminium, zinc, lead, nickel and zinc.
(Reporting by Eric Onstad, Editing by Louise Heavens)
