By ANDY HOME
LONDON — The London Metal Exchange (LME) has recorded its highest quarterly volumes since 2014 thanks to the market turmoil that followed US President Donald Trump’s “Liberation Day” tariffs.
The LME Index basket of base metals plunged 11 percent after the blanket tariffs were announced on April 2 as metal markets took fright at the prospect of a full-blown trade war.
The wholesale unwind of positions and subsequent re-engagement as prices staged a partial recovery resulted in record daily volumes on April 7 and all-time high monthly trading action.
Chaos tends to be good business for the 148-year old London market, which has been owned by Hong Kong Exchanges and Clearing since 2012. Activity last spiked in April 2024, when the United States and UK announced sanctions on Russian metal.
A more nuanced tariff impact on the CME exchange in the United States suggests the heightened trading activity has been driven by the physical supply chain rather than funds.
Trump’s tariffs’ blizzard has accelerated the LME’s recovery from the 2022 nickel crisis, when it risked what then head of LME Clear Adrian Farnham described as “a death spiral”.
It took almost a year for volumes to recover after the exchange’s decision to suspend its nickel contract and cancel trades, a call that was ultimately vindicated in the London High Court.
Nickel volumes returned to pre-crisis levels last year and average daily volumes surged another 25 percent in the first half of this year despite the price CMNI3spending most of the time treading heavy water around four-year lows.
It helps that there is a lot of nickel to be financed. LME stocks have risen from 34,000 metric tons in the middle of 2023 to over 200,000 with another 71,000 tons sitting off warrant in LME warehouses.
Low prices and an oversupplied market have also combined to revive the LME’s dormant cobalt contract.
First-half volumes of 6,089 lots were the highest since 2019 and there are currently over 1,000 tons of the battery metal in LME warehouses, most of it off warrant.
The LME, however, is still playing catch-up with its US counterpart in the battery metals space. CME’s first-half cobalt volumes jumped by 86 percent year-on-year and those of lithium hydroxide by 76 percent.
The copper market has been particularly tumultuous ever since the Trump administration announced an investigation into US imports back in February.
The focus has been on the arbitrage between the CME’s US contract and the international price traded on the LME.
However, that’s not been reflected in trading volumes on the CME futures contract which fell by 40 percent year-on-year in the first half of 2025.
