February 21, 2010
It was reported from NEW YORK on 19 February that the base metals complex ended its gangbuster week in solidly positive territory on Friday, with some metals logging double-digit gains on the back of improved market sentiment and rising inflation pressures.
Lead recorded the biggest gain, soaring 10.4 percent over the course of the week to close second-ring trade on the London Metal Exchange at $2,319 per tonne on Friday. Nickel and zinc also registered sizable weekly gains, climbing 9.8 percent and 7.5 percent to $20,300/$20,310 (bid/ask) and $2,290 per tonne, respectively.
Copper was up 6.6 percent week-on-week at $7,223 per tonne, while March futures prices on the Comex division of the New York Mercantile Exchange rose 8.9 percent to close at $3.357 per pound vs. $3.0825 one week earlier.
Tin was up 4.6 percent on the week to close.
It was reported that the London Metal Exchange launched a fresh effort on Friday to agree an alliance with the Baltic Exchange with a formal proposal to unite two of the City of Londonâ€™s most historic financial institutions and transform global freight trading.
The LME suggested a new exchange â€“ the London Baltic FFA Exchange â€“ should be created as a joint venture between it and the Baltic. The joint venture proposed by the LME would bring the trading of Forward Freight Agreements on-exchange. FFAs, the contracts that allow parties to hedge the costs associated with shipping freight, are currently traded in a telephone, over-the counter market. The Baltic Exchange provides the benchmark indices used to price and settle FFAs.
Donald Brydon, LME chairman, said: â€œThis proposal commands some compelling logic for expanding the FFA market in a joint venture with the LME. Our original approaches, based on electronic trading on a regulated exchange, are now even more relevant given the regulatory and political pressures all OTC markets are facing.â€
A spokesman for the Baltic Exchange said the LMEâ€™s proposals would be â€œcarefully consideredâ€, after an initial approach last year met with a frosty reception.