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03 November 2021

Save the core for the Floor



This article was written by David Gaddes. All views and opinions expressed are strictly his own.


It’s been a while since my last scribbling. Our lives often take us in a direction which is most unlike the one we planned. I had planned to contribute more frequently to Lord Copper in the past year but it did not pan out that way for a number of reasons. Pretty much like the day I walked into that youth employment bureau 52 years ago planning to ignore whatever they had to offer me. I wanted to become a professional footballer but ended up an accounts clerk at an LME Ring Dealing Member and global trader of physical metals.

I think Forrest Gump summed it up best. I don’t know if we each have a destiny or we’re all just floating around accidental-like on a breeze. But I think maybe it’s both. Maybe both are happening at the same time.

Enough about me, what of the LME over the last 50 years?  Another LME Dinner Week has come and gone and I read all of the reports and comments about it on social media including the reopening of the floor. I am not one for living in the past but history shapes what is to come. My father taught me never to become pre-occupied with the past but use it to shape the future. Learn from it. It always pays to reflect on what something was in comparison to what it has become and why. I am not going to bore you with the many changes I have seen. There are others who are far more qualified than I to do that.  I do however have one simple observation to make. In 1971 I was a shipping clerk/physical trader’s assistant. One of my responsibilities was to take the closing LME prices for each metal and record the individual physical contract pricings of each day. I was given those LME prices by an LME broker. In 2021 I am sent the closing prices individually by an LME broker.  I still use those prices for the same things. No change at all. So what really has changed in 50 years ?

In 1971 you could basically count the metals traded on the LME on one hand. Aluminium did not start until 1978 and nickel in 1979. Yesterday I received 23 individual emails for the closing prices. So I suppose the main difference is similar either to going to your bespoke butchers in the high street and being served by a specialist for selected cuts, or going to the nearest superstore to select from shelf after shelf of pre-packaged and labelled meats with a sell by date. In 50 years we have swapped the bespoke specialist for a jack of all trades and quality for quantity. We should keep the core for the floor and the rest electronic. The latter is pretty quick, you know. We can have as many products as we like at our fingertips. The sky is the limit. 

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