The LME Ring Closed. Your Physical Position Had Not.
Quote from chief_editor on June 9, 2026, 5:30 pmLME ring trading hours create closing price reference points that physical commodity pricing may or may not align with. Understanding which close applies to your contract matters.
LME metal prices are quoted in two forms that look similar and behave differently: official prices, established during the Ring trading sessions conducted twice daily at the LME's offices in London, and unofficial prices, established through the LME Select electronic trading system that operates throughout the day and evening.
For a physical commodity trader pricing a metal contract against the LME, the question of which price applies — the official ring price, the unofficial electronic price, or an average of prices over a specified period — is answered by the contract. But the contract needs to be specific, because "LME price" without further specification is ambiguous between these pricing mechanisms.
The difference matters in specific market conditions. When significant news — a macro announcement, a supply disruption, a geopolitical event — occurs outside of ring trading hours, the LME Select electronic price may have moved substantially before the next ring session establishes a new official price. A contract that references the official ring close will have a different reference price than one referencing the current LME Select price at a specific time.
Official Price vs. Unofficial Price: The Ring Is Not the Only LME
The LME's Ring trading sessions — conducted at 11:40 AM and 1:15 PM London time for most metals — produce official prices for specific prompt dates: the cash (spot next) price, the three-month price, and prices for specific forward dates. These official prices are used in physical commodity contracts because they are established through an open outcry process that is considered authoritative and that forms the basis for physical settlement calculations.
The unofficial prices from LME Select electronic trading differ from the official prices when the electronic market moves between ring sessions. A significant intraday move — driven by a FOMC announcement, a Chinese PMI release, or any market-moving event that occurs between the 11:40 and 1:15 London sessions — creates a gap between where the market traded in the morning ring and where it is trading heading into the afternoon ring.
A physical commodity contract that specifies pricing at "the LME official price on date X" will use the ring session official price. A contract that specifies "the LME cash price at 1:00 PM London time on date X" will use the electronic price at that specific time, which may differ from the ring close later in the same session. On a 500-tonne copper transaction, a $30-per-tonne difference between the two pricing references — which can occur on active news days — is a $15,000 difference in the invoice amount.
Industry estimates for the frequency of meaningful discrepancies between LME official prices and LME Select electronic prices on the same date suggest that discrepancies above $10 per tonne in copper, $20 per tonne in aluminum, or similar amounts for other metals occur regularly enough to make pricing specification precision commercially material in large-volume contracts.
The Currency in Which LME Prices Are Expressed
A second dimension of LME pricing that produces misunderstandings is currency. LME official prices are expressed in U.S. dollars per tonne for most metals. Physical commodity contracts denominated in other currencies — euros, Japanese yen, Chinese renminbi — require a currency conversion. The exchange rate used for conversion is a separate specification: which exchange rate, at what time, from which source.
A contract that specifies LME dollar price but does not specify the dollar-to-euro conversion rate creates ambiguity in the euro price that each party may resolve differently. If the euro-dollar rate moved 0.5% between the time the LME ring closed and the time each party looked up the exchange rate for conversion, a 500-tonne copper invoice can differ by several thousand euros between seller's calculation and buyer's calculation.
These arithmetic disagreements at invoice level are typically resolved quickly through commercial communication. But the prevention requires specifying the pricing mechanism completely — not just the benchmark index, but the specific price type, the session, the time, and the currency conversion source and timing. The more complete the specification, the less room for interpretation that produces arithmetic disputes at the invoicing stage.
LME ring trading hours create closing price reference points that physical commodity pricing may or may not align with. Understanding which close applies to your contract matters.
LME metal prices are quoted in two forms that look similar and behave differently: official prices, established during the Ring trading sessions conducted twice daily at the LME's offices in London, and unofficial prices, established through the LME Select electronic trading system that operates throughout the day and evening.
For a physical commodity trader pricing a metal contract against the LME, the question of which price applies — the official ring price, the unofficial electronic price, or an average of prices over a specified period — is answered by the contract. But the contract needs to be specific, because "LME price" without further specification is ambiguous between these pricing mechanisms.
The difference matters in specific market conditions. When significant news — a macro announcement, a supply disruption, a geopolitical event — occurs outside of ring trading hours, the LME Select electronic price may have moved substantially before the next ring session establishes a new official price. A contract that references the official ring close will have a different reference price than one referencing the current LME Select price at a specific time.
Official Price vs. Unofficial Price: The Ring Is Not the Only LME
The LME's Ring trading sessions — conducted at 11:40 AM and 1:15 PM London time for most metals — produce official prices for specific prompt dates: the cash (spot next) price, the three-month price, and prices for specific forward dates. These official prices are used in physical commodity contracts because they are established through an open outcry process that is considered authoritative and that forms the basis for physical settlement calculations.
The unofficial prices from LME Select electronic trading differ from the official prices when the electronic market moves between ring sessions. A significant intraday move — driven by a FOMC announcement, a Chinese PMI release, or any market-moving event that occurs between the 11:40 and 1:15 London sessions — creates a gap between where the market traded in the morning ring and where it is trading heading into the afternoon ring.
A physical commodity contract that specifies pricing at "the LME official price on date X" will use the ring session official price. A contract that specifies "the LME cash price at 1:00 PM London time on date X" will use the electronic price at that specific time, which may differ from the ring close later in the same session. On a 500-tonne copper transaction, a $30-per-tonne difference between the two pricing references — which can occur on active news days — is a $15,000 difference in the invoice amount.
Industry estimates for the frequency of meaningful discrepancies between LME official prices and LME Select electronic prices on the same date suggest that discrepancies above $10 per tonne in copper, $20 per tonne in aluminum, or similar amounts for other metals occur regularly enough to make pricing specification precision commercially material in large-volume contracts.
The Currency in Which LME Prices Are Expressed
A second dimension of LME pricing that produces misunderstandings is currency. LME official prices are expressed in U.S. dollars per tonne for most metals. Physical commodity contracts denominated in other currencies — euros, Japanese yen, Chinese renminbi — require a currency conversion. The exchange rate used for conversion is a separate specification: which exchange rate, at what time, from which source.
A contract that specifies LME dollar price but does not specify the dollar-to-euro conversion rate creates ambiguity in the euro price that each party may resolve differently. If the euro-dollar rate moved 0.5% between the time the LME ring closed and the time each party looked up the exchange rate for conversion, a 500-tonne copper invoice can differ by several thousand euros between seller's calculation and buyer's calculation.
These arithmetic disagreements at invoice level are typically resolved quickly through commercial communication. But the prevention requires specifying the pricing mechanism completely — not just the benchmark index, but the specific price type, the session, the time, and the currency conversion source and timing. The more complete the specification, the less room for interpretation that produces arithmetic disputes at the invoicing stage.