Sumitomo causes LME to break tradition
Sumitomo causes LME to break tradition
LONDON (Reuter): The London Metal Exchange, the hub of world industrial metals trading, broke a 118-year-old tradition on Monday when it appointed a staff member to set the official benchmark prices on the trading floor.
The change was prompted by a review of LME practices after the scandal last year when Sumitomo Corp of Japan said it had lost US$2.6 billion in copper trading on what it alleged was rogue dealings.
It means that representatives of ring trading companies will no longer set official prices.
The reform, the first since the Sumitomo copper affair, was intended to remove any appearance of a conflict of interest by trading companies holding market positions, LME officials said. Commodity prices were mostly not much changed on Monday.
In industrial metals copper saw early gains, but the red metal drifted back during the London afternoon to trade at 1715 GMT at around $2,247.50 a ton as contract maturities came into play. Other base metals remained little changed.
Elsewhere in commodities world coffee prices eased, ending last week's fund-led rally, after funds took profits and liquidated long positions ahead of looming contract maturities.
London March futures for the Robusta type coffee ended at $1,500 a ton, down on Friday's close of $1,542.00. But coffee remains sharply up -by about 20 percent - from where it ended 1996 at $1,235.
An export backlog of some 300,000 60-kg bags stranded after a dockworker strike at key grower Colombia's Buenaventura port has left supply tight.
German retail coffee prices may have to rise on the back of a firm dollar and higher raw material costs to coffee roasters, a German coffee industry spokesman said.
In precious metals gold continued to recover from last week's slide to a 40-month low to fix in the London afternoon $1.10 up on Friday at $353.60 an ounce.
The yellow metal saw light gains during the afternoon, and closed 65 cents up on Friday at $354.65 an ounce.
London March futures for the world benchmark Brent Blend of crude oil traded easier after a decline last week as concerns about low stocks of heating fuel abated.
World wheat prices were little changed, although Chicago wheat futures eased on diminished U.S. export prospects, after Egypt purchased 110,000 tons of wheat from Australia rather than the United States.