Societe Generale to Exit LME's Open-Outcry Trading Floor, Sparking Concerns Over Ring's Future

Societe Generale International has decided to leave the London Metal Exchange's open-outcry trading floor, significantly reducing the number of current members to seven. The move raises concerns over the future of the LME ring, the last open-outcry trading venue in Europe, and its pricing mechanisms for industrial metals.

Societe Generale International has announced its departure from the London Metal Exchange's (LME) open-outcry trading floor, a move that raises critical questions about the future of this historic trading venue.

The decision reduces the number of LME ring members to seven, down significantly from about 30 in the late 1980s. The LME ring, known for its circle of padded red leather seats and traders using hand signals for intense five-minute trading sessions, sets daily official prices that serve as global benchmarks for metals producers and consumers.

This departure follows the exit of ED&F Man Capital Markets two years ago. The LME has indicated that the ring could be closed and pricing might move entirely to the electronic system if membership falls below six or trading volumes dip below specific levels. However, these criteria have not yet been met, according to an LME statement.

(With inputs from agencies.)