By Alex Harrison, editorial and pricing director
London metals week has been critical in the commodities calendar since the days when it took three months to ship tin from Malaysia to the UK.
Next year’s contracts are the nub of it: volumes, prices, timing, optionality, new suppliers. Beyond that it is an invaluable opportunity for traders in the world’s most vital commodities to gather and take stock of the risks and opportunities ahead. Look towards 2022, and the issues that will galvanize them are broader than they were in 2019, when the event last happened.
Price volatility has increased, and years of under-investment, huge government infrastructure spending and substantial investment in the energy transition have led to predictions of a commodities supercycle.On the other side are questions such as how central bank tapering will affect credit, demand and businesses’ viability; or the potential effects of a debt crisis in China sparked by real estate developers defaulting on their loans.
Beyond the market interest, there are changes that are unprecedented in recent times, if at all: climate disruption, the realignment of global trade and supply chains, fears or stagflation and a skepticism about free trade.
Some estimates suggest that around two-fifths of the traders that came in 2019 will be in London this week. Nowadays a counterpart or colleague on the other side of the world is a second away on Zoom, and it only takes three weeks to move copper from Chile to China. But when you consider what companies and traders have in front of them, the forces pulling them to London are clear.
Explore our special LME Week 2021 coverage