Reuters

London 

The London Metal Exchange (LME) yesterday trimmed a proposed average increase in transaction fees to 31% from 34% after complaints by members.

The LME said that it made the changes following feedback from members and because of its commitment to open-outcry trading and to support the price discovery process.

The 137-year-old LME had announced the fee increase in September as its owner moved to boost profit from the world’s biggest industrial metals market after a costly takeover.

The LME’s owner, Hong Kong Exchanges and Clearing Ltd (HKEx) , had splashed out $2.2bn to buy the exchange, a price that analysts said was very expensive.

But some LME members objected to the fee increase, saying it would be likely to force brokers and banks to ditch some commission-free terms and review their business models.

The tariff structure included a significant discount on “ring” trading after the LME said in June it would keep open-outcry trading, bucking a trend by most other markets to shift to all-electronic operations.

Friday’s revision will extend that ring discount to other trades, such as telephone transactions, that are based on trades in the ring, LME spokeswoman Miriam Heywood said.

The revised average increase of transaction costs at 31% includes clearing fees.

Looking at only trading fees, the increase will come down to 60% from 65%, Heywood said.

The new fees will still take effect from Jan. 1 and there would be no further revisions before then, it said.

Before the LME’s sale in December 2012, it was owned by the banks and brokers that used it and therefore trading fees were kept very low for members.

HKEx promised when it was bidding for the LME that it would freeze the low fees during an initial period, but the moratorium expires in January.

Meanwhile London nickel prices rose to their highest in more than two months due to tight supplies of ore, while copper was on track to post its biggest weekly rise since August as prices rebounded from falls earlier in the week.

Three-month nickel on the London Metal Exchange (LME) rose to its highest since late September at $17,200.