Eric Onstad

LONDON (Reuters) – Societe Generale International will withdraw from the open market for metals trading on the London Metal Exchange, the bourse said on Friday, raising questions about the future of the ring.

The world’s oldest and largest industrial metals market has been steadily losing members over the years. It was the last open metals market in Europe.

Following SocGen’s move, there are now seven member entities operating in the LME ring, down from around 30 at its peak in the behind schedule 1980s.

The LME ring consists of a circle of padded red leather seats for traders who operate cryptic hand signals during five-minute breaks from the intense trading of precious metals, aluminum, zinc, lead, nickel and tin.

Official LME prices, set daily on the exchange floor, provide a global reference point for metal producers and consumers in their physical delivery contracts.

Societe Generale (OTC:) will no longer be an LME member trading on the regulated market as of 27 August, moving from Category 1 to Category 2, the LME said in a statement.

Category 2 members may trade for their own account and on behalf of clients using the LME electronic system and are members of the LME clearing house.

Societe Generale declined to comment. A source close to the bank said there would be no changes to the way it supports metals clients.

Two years ago, the LME lost ED&F Man Capital Markets as a trading member when it was acquired by another member, Marex.

In 2021, the LME decided that the ring could be liquidated and official prices transferred solely to the electronic system if the number of Category 1 members falls below six or if their trading volume in the second ring falls to less than 75% of last year’s volume.

“The LME confirms that none of these ring price liquidity criteria have been met as a result of this announcement,” the exchange said.

The LME declined to comment further.