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The London Metal Exchange (LME) today launched a new, shorter, pricing period for its Asian Benchmark prices in response to growth in Asian trading on the Exchange's electronic platform, LMEselect. The new five-minute pricing window, reduced from 15 minutes, focuses liquidity and enhances the price discovery process.
In 2012, three month futures trading on LMEselect during the Asian time zones (before 07:00 UK time) increased 13% year-on-year. In total, 16% of all three months futures trading on LMEselect was transacted during this period.
"Due to the increased volumes transacted during Asian trading hours, we have been able to shorten the pricing window and further concentrate liquidity and transparency," said Liz Milan, Managing Director of LME Asia. "The Asian Benchmark prices will now also be published in line with the close of other Asian exchanges, which gives users in the region a more meaningful set of prices."
From today, the LME Asian Benchmark prices will be derived from trading volumes on LMEselect between 06.55 and 07.00 GMT (14.55 and 15.00 CST), and published daily at 07.01 GMT (15.01 CST). During British Summer Time (BST) prices will be published at 08.01 BST and 15.01 CST.
The Asian Benchmark, first launched in January 2011, generates a reference price for three-month futures for aluminium, copper and zinc based on the volume-weighted average price (VWAP) of the five-minute window. These prices are available on LMElive and through the Exchange's approved network of data vendors at no separate fee or licence cost.
