LME decisions not always ‘universally applauded’ but in best interests of market, HKEX: LME Week

The London Metal Exchange’s relevance has “arguably never been stronger” despite a challenging year, according to Nicolas Aguzin, chief executive officer of LME's owner Hong Kong Exchanges and Clearing (HKEX)

Opening this year’s LME Week seminar on Monday, October 24, Aguzin said: “The decisions the LME has made have not always been universally applauded but, critically, it has sort to put the interests of the market as a whole first.

“The LME has a unique 145-year history as a market and its relevance has arguably never been stronger. Its value to the global metals market and all of you, providing choice, a pricing venue and a community is as important as ever,” he told delegates.

Aguzin joined HKEX in May 2021 from JP Morgan succeeding Charles Li who had been CEO for more than a decade.

There has been increased market volatility over the past year. And the exchange was forced to suspend trade in its nickel contract following wild volatility that drove prices up to more than $101,000 per tonne in March.

“The world has [had] to deal with the impact of the Covid-19 pandemic, geopolitical fragility and a black swan event like the Ukraine war – it has been a uniquely complex and tough year,” Aguzin said.

“The LME has been on the front line in recent years, weathering the impact of port closures, supply chain bottlenecks, surging demand and market volatility across the global metals industry.”

Aguzin said that, throughout this challenging period, the exchange has demonstrated its commitment to the future of the market as a whole.

“The LME has had a challenging year, but I believe this will be a year that will come to be seen as an important one in the LME’s long and rich history,” he said.

“The broader uncertainties and geopolitical tensions we have seen over the past few years are not likely to go away any time soon… We won’t agree all the time, but there are significant opportunities ahead,” he added.

Aguzin said that the exchange will continue to focus on two key areas of opportunity going forward: sustainability and innovation.

The LME kicked off LME Week by announcing new additions to its sustainability focus, including updates to LMEpassport.

“The demand from the green energy sector is changing the world of commodities. The carbon neutrality commitments of governments around the world present a significant opportunity,” Aguzin said.

“Demand developments and new applications in electric vehicles, wind & solar energy and energy storage are increasing. These will drive growing demand for the key metals that are important in these sectors – copper, nickel, lithium and more. This is a critical time for the base metals industry,” he added.

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