China could be key in bid for LME

The London exchange has long sought to win approval from regulators in the world’s biggest metals consumer to list its warehouses nearer customers in the country which also accounts for 40 per cent of copper consumption, Asian industry sources said.

InterContinental Exchange are the last two on an original shortlist of four to buy the world’s biggest metals market place, after the exit on Tuesday of CME Group and NYSE Euronext the week before.

Both bids are just above the £1bn mark that the LME has been independently valued at. Both have also guaranteed to keep the 135-year-old LME’s operations unchanged, including its open outcry trading ring and its unique prompt-date system, sources said.

A spokesman for the LME said it would be up to the exchange’s shareholder members who use the exchange to decide on a deal, if any. A spokesman for HKEx declined to comment.

The LME intends to present just one bid to shareholders, sources said. But even though two bidders have dropped out, they could re-enter the fray at any point.

While ICE is believed to have put in a slightly higher offer for the LME, geography is looking increasingly like the deciding factor.

“ICE is effectively a European market, so anything they do will come with a swathe of bureaucrats known as the European Commission,” said one industry source in London.