LME Copper is a group of spot, forward, and futures contracts, trading on the London Metal Exchange (LME), for delivery of Copper (Grade A), that can be used for price hedging, physical delivery of sales or purchases, investment, and speculation.
Carry trades involving Aluminium futures also have reduced minimum tick sizes at $0.01 per tonne.
[8] The origins of the LME prompt date system, in particular the three months daily prompt date system, actually originated with LME Copper trading at the beginning of the exchange.
When the LME was founded in 1877 based on Copper and Tin trading, the exchange instituted the daily prompt date contracts to match the delivery times of those commodities.
Its weighting in these commodity indices give LME Copper futures prices non-trivial influence on returns on a wide range of investment funds and portfolios.
The rapid movement of Copper prices and of physical Copper out of COMEX warehouses lead to investigations by the Commodity Futures Trading Commission (CFTC) and the Securities and Investments Board (SIB).
Hamanaka's speculative position contributed to LME Contract prices to rise to $2800 per tonne in May 1996, and Sumitomo's subsequent unwinding of that position contributed to those same prices to plunge to $1785 per tonne, a two and a half year low, on June 25, 1996 almost two months later.
[18] The State Reserves Bureau Copper Scandal refers to a loss of approximately $150 million USD as a result of trading LME Copper futures contracts at the London Metal Exchange (LME) by rogue trader Liu Qibing, who was a trader for the Import and Export Department of the State Regulation Centre for Supply Reserves (SRCSR), the trading agency for the State Reserve Bureau (SRB) of China in 2005.