This post is more metals related but seeing the size of this yet...

This post is more metals related but seeing the size of this yet to be developped site, you would have to think it will come up as conversation.

By Simon Clark, Anna Stablum and Franz Wild
Oct. 12 (Bloomberg) -- “Copper! Copper!” shouts a trader
at 4:59 p.m. in the London Metal Exchange’s dealing ring, where
frowning men in blue suits and pink ties jab fingers and scream
at each other in the last 60 seconds of trading.
The 132-year-old LME is the world’s largest metals exchange
and London’s last so-called open outcry trading floor. Its 500
warehouses worldwide support $10 trillion of annual trading and
make the LME a pillar of Europe’s largest financial center whose
influence stretches to the heart of Africa.
“For us, London is a price,” Patrick Nsumba, a trader in
the Democratic Republic of Congo, said in an interview in
Kinshasa. He buys copper ore from men and boys who clamber down
crumbling holes to dig in the dark. “Even when we sell to
China, London sets the price.”
In a year of British bank bailouts, record losses for
financial companies and increased regulation and taxes, the
volume of metals traded rose 0.6 percent in the first nine
months. Copper prices doubled on demand from China, the world’s
largest user of the metal, over the same period.
This week, about 4,000 metal buyers and sellers from
Singapore to Santiago arrive in London to find partners in an
annual ritual called LME Week. More than 95 percent of the
exchange’s business is from overseas.
“It’s known as the mating season,” said Nick Moore, head
of commodities research at Royal Bank of Scotland Group Plc, the
largest U.K. bank now controlled by the government.

No Clear Rival

While at times appearing antiquated, the LME still doesn’t
have a major rival, said Christopher Gilbert, a professor at the
University of Trento in Italy.
The LME was founded in 1877 to feed industrial Britain’s
need for metals. Three-month contracts for copper and tin are
based on the time it took shipments of copper to arrive from
Chile and tin from Malaysia.
Competition from the Shanghai Futures Exchange is limited
because foreign investors can’t trade on the Chinese exchange.
“The LME has a first mover advantage,” said Gilbert, who
studied the exchange. “Shanghai could possibly take trading
volume away, but nowhere else has had any success.”
This week, meetings take place at hotels, restaurants and
offices across London from breakfast to dinner. Jose Miguel
Ibanez Anrique, general manager of Haldeman Mining Company SA,
is flying from Santiago to sell 20,000 tons of copper.
“I live down here in Chile, which is far away from all the
customers, so this week is very important for us,” Ibanez
Anrique said. “The personal relationship is very important.”

The Bankers

Miners and manufacturers aren’t the only ones meeting this
week. Just 1 percent of metal contracts traded in London are
taken for physical delivery. The remaining 99 percent of trades
are by banks, hedge funds and other investors.
“You are bringing in the bankers, you are bringing in
those who are financing metal,” said Mike Frawley, global head
of metals at trading firm Newedge Group. “You bring in the
shippers and you bring in the whole of the industry.”
That makes LME Week crucial for gathering information. Last
year, executives of Freeport-McMoRan Copper & Gold Inc., the
world’s largest publicly traded copper producer, were struck by
the danger of the financial crisis.
“We were expanding, we were growing, and we needed to
really cut back and try to reduce costs,” said Kathleen Quirk,
the company’s chief financial officer.

‘Gentlemen’s Club’

London can remain the money center for metals as long as
liquidity and credibility lasts, said Jack Rabinowitz, a partner
at London law firm Teacher Stern Selby who advised clients on
action over alleged manipulation of aluminum prices in 2005.
The LME has been “notoriously susceptible” to perceptions
of price manipulation, “although that has improved in recent
years,” said Rabinowitz.
The U.K. regulator closed an investigation of aluminum
prices in 2005, saying it found no evidence of manipulation.
The exchange is owned by its members and largely self-
regulated, making it appear like “a gentlemen’s club,” Gilbert
said. There is no limit to the size of an investor’s holding in
any of the traded metals, which also include aluminum, zinc and
steel. More than 90 percent of tin stockpiles tracked by the
bourse are currently owned by one company.
In 1998, Japanese trader Yasuo Hamanaka was jailed after
losing $2.6 billion for Sumitomo Corp. after he hoarded copper.

‘New Lovers’

Three years later, the LME introduced an electronic trading
system that now accounts for about half of trading.
“The LME is giving transparency,” said Patrick Ammerlaan,
head of metal sales at Boliden AB, Europe’s second-largest zinc
producer. He’s flying from Sweden to attend the week’s main
event, a black tie dinner for 2,000 on Tuesday evening where
brokers host clients at the Grosvenor House Hotel on Park Lane.
“I have never told my wife about the expression ‘the
mating season,’” Ammerlaan said. “It’s the first indications
that people give to each other, like new lovers.”
Chinese demand accounts for about 35 percent of the copper
market this year. Copper volumes in Shanghai increased six times
in the first eight months of 2009 from a year before.
“I do not see the Shanghai Futures Exchange challenging
the LME in the short-run,” said Christian Velten-Jameson, a
vice president of Paris-based Nexans SA, the world’s biggest
maker of cables and wires. “If you are talking 25 years ahead,
then perhaps.”