Societe Generale leaves London Metal Exchange’s open-outcry trading floor

By Eric Onstad

LONDON (Reuters) -Societe Generale International will drop its membership of the London Metal Exchange’s open-outcry trading floor, the exchange said on Friday, raising questions about the future of the ring.

The world’s oldest and largest market for industrial metals has steadily lost members over the years for the ring, the last open-outcry trading venue in Europe.

The SocGen move leaves seven members operating in the LME ring, down from about 30 at its peak in the late 1980s.

The LME ring features a circle of padded red, leather seats for traders who use arcane hand signals during five-minute bursts of intense trading in , aluminium, zinc, lead, nickel and tin.

Official LME prices, set on the trading floor daily, are used by metals producers and consumers as the global reference for their physical supply contracts.

Societe Generale (OTC:) will no longer be the ring-dealing member of the LME as of Aug. 27, moving from being a Category 1 member to Category 2, the LME said in a statement.

Category 2 members can trade for their own account and on behalf of clients using the LME electronic system and are members of the LME clearing house.

Societe Generale declined to comment. A source close to the bank said there would be no change in how it supports metals clients.

Two years ago, the LME lost ED&F Man Capital Markets as a ring-dealing member because it was acquired by fellow member Marex.

The LME decided in 2021 that the ring could be liquidated and official prices moved purely to the electronic system if the number of Category 1 members falls to fewer than six or their trading in the second ring falls to less than 75% of the last year’s volumes.

“The LME confirms that neither of these ring price liquidity event criteria have been met as a result of this announcement,” the exchange said.

The LME declined further comment.