LONDON — The London Metal Exchange open-outcry ring went dark for the first time since World War II on Monday and aluminum prices slumped to their lowest since June 2016 on fears of a severe global recession. The 143-year-old LME temporarily closed its circle of padded, red-leather seats, Europe’s last open-outcry trading venue, to fight the virus.
The transition to full electronic trading on the LME went smoothly, but volumes were patchy, traders said. “Things are going okay, it’s just difficult to see volumes as there’s little liquidity. It also feels very weird trading while looking at my garden, it’s really lacking market atmosphere,” one trader said from his home.
Base metals joined stocks, oil and other financial markets in a sell-off on Monday while Shanghai copper fell to the weakest in nearly 11 years.
“Right now we’re seeing demand falling off a cliff, consumer confidence is shaken across the world, and commodities are responding accordingly,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“Sentiment also got a knock overnight after the U.S. Congress struggled to reach agreement. The focus will be on whether they can get a package over the finish line, that may give some relief to the market.”
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