July 8, 2020 / 4:59 PM / a month ago

UPDATE 1-LME trading floor to stay closed despite lockdown easing

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LONDON, July 8 (Reuters) - The easing of social distancing in England will not allow the London Metal Exchange (LME) to reopen its open-outcry trading floor, which has been closed for more than three months, the exchange said on Wednesday.

The 143-year-old exchange temporarily closed the floor - the last open-outcry floor in Europe - on March 23 due to COVID-19 restrictions and shifted activity to its electronic system.

The exchange said last month it would examine whether it could reopen the floor, known as the ring, after the government announced less strict social distancing rules, which took effect on July 4.

But the exchange, the world’s oldest and largest market for industrial metals, said in a statement on Wednesday the relaxed government rules which allowed pubs and restaurants to reopen would not permit the ring to restart.

“Having fully assessed the updated UK government guidance that came into effect on 4 July, our position remains not to reopen the ring,” it said.

It remained difficult to provide a timeline on reopening the floor, but the LME said it planned to set out a roadmap with specific criteria for restarting open-cry trading.

“We will also continue to actively assess our options as the guidelines evolve.”

While nearly every other financial exchange moved activity to screens, the LME has been one of the last bastions of live trading, which takes place in a circle of padded, red-leather benches.

Floor dealers on the exchange, owned by Hong Kong Exchanges and Clearing Ltd., have resisted the shift to full digital trading during the pandemic. (Reporting by Eric Onstad. Editing by Jane Merriman and Barbara Lewis)

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