SocGen to Exit LME’s Open-Outcry Trading Floor

Societe Generale SA is set to withdraw from the London Metal Exchange’s (LME) open-outcry trading floor, a move that will leave only seven members on the iconic “Ring” and further fuel debates about its future.

Starting August 27, Societe Generale’s UK unit will cease operations on the trading floor but will continue serving clients as a clearing member of the exchange. The bank’s departure follows similar exits by other dealers, including Triland and ED&F Man, in recent years.

The LME’s trading floor, known for its red-leather couches and hand-signaled trades, has faced declining relevance in a market increasingly dominated by electronic trading. While some view the Ring as outdated, others argue it remains an effective platform for managing the LME’s complex daily, weekly, and monthly contracts. Critics, including high-frequency trading firms, have long pushed for its closure.

The LME has previously stated that it would consider closing the Ring permanently if fewer than six members remained or if the remaining members accounted for less than 75% of historically traded volumes. In a notice to members, the exchange confirmed that Societe Generale’s withdrawal does not meet these criteria.

The Ring’s roots trace back to the UK’s Industrial Revolution when metals traders gathered in a London coffee house to conduct business. However, even before the Covid-19 pandemic forced a temporary closure, trading had increasingly shifted to electronic systems and direct interoffice deals. Despite a brief reopening, trading volumes on the floor have significantly decreased.

Societe Generale’s exit leaves CCBI Global Markets as the only remaining bank with a presence on the Ring. Other floor brokers include Amalgamated Metal Trading, Marex Group, and Sucden Financial. The decision is not expected to affect Societe Generale’s metals team headcount, as the bank remains committed to providing clearing and execution services on the LME.