The London Metal Exchange (LME) offers futures and options contracts for non-ferrous metals, steel and plastics. It was established in London over 130 years ago, and until recently only traded in non-ferrous metals. The exchange provides a transparent forum for establishing prices on the day of trading (cash) and for hedging prices months and even years forward.
With its longer established contracts – like copper, aluminium, nickel, lead, zinc and tin – LME prices are used as a reference worldwide. Its steel billet contracts were launched in 2008. Being a principal-to-principal market, only member firms are able to trade. They provide the physical industry with access to the market, to the risk management tools and to the delivery mechanism.
Trading takes place via open-outcry trading on the floor of the exchange, through an inter-office telephone market and through the LME’s electronic trading platform. LME approved warehouses around the world provide a point of delivery of last resort or source of metal in extremes of market supply and demand. And for more detail click and see wikipedia entry.