LME considers new metals contracts

The London Metal Exchange, the world's largest metals bourse, may introduce new contracts for a variety of steel products and is also considering metals like magnesium and cobalt.

The LME announced plans last month to start handling steel contracts via electronic and telephone trading, starting Feb. 25. Trading on the LME dealing floor will begin April 28. The contracts are for steel billet, a semi-finished product made from scrap. One will be deliverable in Turkey and the other in South Korea.

"One steel contract for the entire steel industry is akin to saying the one base-metals contract can meet the needs of all those in the aluminium, copper, nickel, lead, zinc and tin industries," the LME chief executive, Martin Abbott, said at a seminar to mark the beginning of LME Week in London on Monday. "Our steel billet contracts are therefore a start of what could be several LME steel contracts."

The 130-year-old bourse is competing with rivals including the New York Mercantile Exchange to expand its share of commodities trading after metals and energy prices climbed to record levels last year. The LME handled commodities trades valued at $8.1 trillion in 2006, 80 percent higher than a year earlier.

The LME has received a study on magnesium trading and will begin to assess it Tuesday, Abbott said.