WFE Focus Team , London , World Federation of Exchanges | Nov 2017

 

We are delighted to welcome Matthew Chamberlain, CEO, LME, who tells us about his first few months in the role, and his vision for the exchange whose roots date back to 1877.

Matthew, you’ve been in the CEO role since April, and have already taken some bold steps, from launching the LME’s ‘Strategic Pathway’, to announcing a trial of setting closing prices electronically next year. Please give us your viewpoint on how the first few months have gone, and how you’re adjusting to the new role?

My first six months have certainly been busy! While I was Interim CEO we began working on our Discussion Paper – which was a market-wide process seeking views from our users on a number of market structure related areas. By the time we launched the Discussion Paper I had been appointed as the permanent CEO and since then much of my time and focus have been about engaging further with our members and users to work out a balanced and fair way to evolve our market. Our members were extremely receptive and helpful in identifying the key areas requiring change, and we have worked hard to address these areas. So, in short, it’s been a very busy time but a very insightful one, and I’m pleased that our Strategic Pathway, which we announced in September has been positively received and we are working hard on the implementation of the initiatives set out in our strategy.

You’ve announced an exciting delivery plan for 2018. Could you tell us more about that please?

Our Strategic Pathway sets out both short-term actions and longer term plans intended to help strengthen our position as the global hub for metals trading and clearing, and to bring growth for our business and for the market. We’ve been clear that all our plans will be guided by four key principles: serving the physical market; ensuring fairness; increasing user choice; and maximising trading efficiency. In the short-term, we have substantially reduced certain fees to support our physical user base and further encourage use of the LME’s daily date structure, and we have just launched a market-wide consultation process about the introduction of a fair financial OTC booking fee to address current fee disparities between Exchange and OTC contracts.

Over the course of 2018, we also intend to implement changes to our membership structure to open up access to the LME. We’re also making some enhancements to our electronic trading facilities to bring greater trading efficiency and we’re looking to launch a new suite of contracts to include additional ferrous metal products and battery metals such as lithium and chemical cobalt and nickel contracts.

And longer-term, what does the LME of the future look like?

LME Infographic

In the longer term, we are committed to evolving our market through balancing the needs of all our stakeholders while ensuring that we are best positioned to transform technological, regulatory and political challenges into opportunities to grow our business and our market.

We are taking a proactive approach to Brexit and are committed to our position in London as the point of convergence for many interconnected systems, industries and processes. We are working with our non-UK members to ensure ongoing access to the LME and LME Clear, but given the LME pre-dates the EU, we are confident that we can continue to thrive in a post-Brexit world.

LME Week took place earlier this month, and was a huge success with record seminar numbers, and a positive mood amongst participants. What are your key highlights from the conference?

LME Week is always a great time of year when the global metals market flood to London for a week of meetings, industry events and, well, parties! And we were delighted that so many people came along to our seminar this year. We were lucky enough to have been joined by the President and COO of Freeport McMoRan, Red Conger, who discussed copper's role in the Fourth Industrial Revolution. This year’s panel discussions covered the renewable energy and electric vehicles debate, an analysis on the current state of play of base metals globally, and the evolution of precious metals – a real highlight from an LME perspective given the launch of LMEprecious earlier this year. Precious metals are an important growth area for us and we plan to launch options for gold and silver next year with platinum and palladium futures to follow.

What are the hot trends in metals right now? Is it all about electric cars?

I think it’s evident that EVs will reshape the automotive sector and will be game-changing for metals usage and our industry. It may not happen today, and there will probably be rallies and dips before we get there - but the structural trend is clear. As such it’s important that the LME, as the global metals trading hub, leads industry efforts to bring the best risk management tools to this growth area. We held our first workshop on this topic during LME Week, where more than 50 participants joined us from throughout the battery metals supply chain to discuss the challenges and potential ways forward. We’re delighted to have received such a positive reception and we are busy following up with all participants bilaterally as we navigate a path towards the launch of the right risk management products for the EV industry.

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