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Price notice: CME vs LME copper arb update

Sep 20, 2018 | 02:26 PM | Chicago | Dalton Barker


American Metal Market is proposing to extend the evaluation period of a daily calculation of the arbitrage between CME and London Metal Exchange copper prices for an additional 30 days.

The extended evaluation period would allow for further consultation with the market.

As explained in the original proposal, this tool would gauge fluctuations in the arbitrage based on the CME’s most-active Comex copper contract (measured by the highest amount of volume and open interest) and the LME Select three-month copper price.

By providing a standardized tool for market participants, subscribers would be able to easily monitor the arbitrage between the two continents and exchanges. A paper arbitrage was chosen in place of a physical arbitrage due to the differences in warehousing practices between the two exchanges.

The consultation period for this proposed launch will be extended for one month from the date of this pricing notice to Friday October 12, 2018, with changes taking place from Monday October 15.

American Metal Market has no financial interest in the level or direction of the price assessment.

To provide feedback on this price, or if you would like to provide price information by becoming a data submitter to this assessment, please contact Dalton Barker at pricing@metalbulletin.com. Please add the subject heading FAO: Dalton Barker, re: Copper arb.

To see all of American Metal Market's pricing methodology and specification documents, click here.