LME volume growth slows

LONDON: Trading volumes on the London Metal Exchange (LME) grew by 3.5 percent last year, less than half the rate seen in 2013 and the slowest growth since the global financial crisis in 2009.
There seems little doubt that the slowdown in activity reflects reduced investor interest in the industrial metals complex.
The departure of many specialist fund players and a rethink by some of the world’s biggest investors on the benefits of including commodities in their portfolios have thinned the ranks of some of the highest-profile names in the LME market.
Barclays, Deutsche and Credit Suisse have left the arena over the last 12 months, both symptom and cause of slower trading growth. But this is also another manifestation of the continued eastwards migration of the metals markets. As Western banks leave, their places are being taken by Chinese players such as GF Financial, Bank of China and, as of Jan. 26, China Merchant Securities.
And metals trading in China itself is booming, with the Shanghai Futures Exchange (SHFE) registering another year of robust growth.