Total trading volumes at the exchange jumped 7.5 percent in the first half to more than 59 million lots, LME Chief Executive Martin Abbott told a news conference in London.
"The first half has been a good six months," Abbott said. It's been a good first half, with good solid performance."
Among the contracts showing the highest volume growth in 2010, copper futures and options trading grew 20.4 percent to 16,338,186 lots in the first six months, while volumes of lead futures and options grew 30.5 percent to 3,826,307 lots.
Having formally opened a Singapore office three weeks ago, the LME said it was in negotiations with the Singapore Exchange (SGX) to set up "mini LME contracts" for early next year.
"The rationale behind this is that we believe there is a retail market available in Asia," Abbott said, adding the full plans would be announced in the next couple of weeks and a launch in the first half of next year was the target.
"Our wholesale market is not ideally placed to capture that business," he said. "Mini contracts, cash settled and traded locally ... will not be restricted simply to Singapore."
Abbott also said that the LME was looking to introduce early morning electronic Asian benchmark contracts, which would trade around the end of the main Asian day.
"We think there is enough flow, certainly in our larger contracts, for us to derive a benchmark," he said. "There would be no settlement against that benchmark -- it would simply be a number, but a number we think would be relevant and useful."
Abbott confirmed that the exchange was looking at introducing a registered warehouse in Taiwan.
"We may not make it within calendar 2010, but certainly there is currently a very serious project under way to be able to list Taiwan as a delivery point for our metals," he said.
Warehousing Study
In recent weeks, metals traders, brokers and analysts have raised concerns about the rules and time required for delivering metal out of certain LME-registered warehouses.
"Because of the fact that there is a lot of concern out there (and) because we realise that there may be a view that we're being very defensive, we are going to commission an independent survey of our warehouses," Abbott said.
He could not give a deadline for the study but said it would look particularly at load-out operations.
On precious metals, Abbott said the exchange hoped to go live clearing over-the-counter (OTC) contracts for the wholesale London gold market from November 8.
The service will be launched with LCH.Clearnet and dealers in London have cautiously welcomed it.
"If we got to the point where we were trading ... in the region of 150 million tons per year -- at that point you would say that the contract was absolutely a success," Abbott said.
The LME will also open its first U.S.-based delivery point for the steel futures contracts, based in New Orleans.
"We will list some further delivery points in the U.S. -- I can't tell you exactly which ones they will be yet, but I do anticipate making an announcement shortly," Abbott added.
Not on the LME's agenda, however, are iron ore contracts, which it sees as having an insufficient spread of participants.
"We don't currently see that there is justification for an exchange traded iron ore contract," he said. "We see a rather small market that is magnified by a game of pass the parcel." (Reuters)
