LME Sees Record Trading Volumes Amid Metal Market Recovery

LONDON, Jan 14 – The London Metal Exchange (LME) achieved record trading volumes in the past year, showcasing a remarkable turnaround from the nickel crisis that nearly brought the 149-year-old exchange to its knees just four years ago.

Owned by London Markets and Hong Kong Exchange and Clearing, the LME capitalized on the volatility in cash markets associated with the current presidential term in the U.S.

Speculative trading surged in the LME base metals sector during the fourth quarter. Remarkably, the average daily trading volume in the last three months of 2025 reached 777,016 contracts, a new quarterly high, surpassing the prior record of 735,604 contracts set in Q2 2014.

The number of open interest in LME futures jumped 15% from 2024, reaching its highest point since early 2021. The speculative enthusiasm didn’t just stay in London; it also spread to China, with significant increases on the Shanghai Futures Exchange in December, as well as a notable influx of retail investors into smaller copper contracts in the U.S.

Impact of Tariffs

U.S. import tariffs, especially those already imposed on aluminum and those threatened for copper, have notably influenced the global flow of metals.

Despite the looming decision about tariffs in June, copper continues to be sourced from global supply chains for the U.S., as traders anticipate the implications of these tariffs. When President Trump initiated an investigation into U.S. copper imports, LME copper trading gained momentum, with average daily volumes rising by 12% compared to 2024.

In contrast, activity in CME’s flagship copper contract experienced a sharp decline of 33%, affected by extreme fluctuations in arbitrage prices with London. However, U.S. markets partially mitigated the disruptions in the aluminum sector caused by a substantial tariff increase in June.

In fact, physical aluminum premium contracts in the Midwest U.S. and Europe saw record trading volumes last year, up 47% and 72%, respectively, from the previous year.

Investor Interest Rebounds

While institutional investors remain hesitant about CME copper contracts, many have turned their attention back to the LME since September.

The renewed interest in base metals has been partly fueled by trends in the more popular precious metals market, as well as significant gains in copper and nearly all LME metals, other than lead. Copper and tin trading volumes were the highest since 2013 and 2014, respectively. Lead reached unprecedented activity levels, and nickel recorded its second-highest quarterly trading volume ever.

Indeed, last year’s nickel trading was the strongest since 2019, which helped rebuild trust in the London market after the upheaval of 2022.

Most funds seem to have accepted the controversial decision regarding canceled nickel trades, which was upheld by the UK High Court.

Surge in Shanghai

Excitement in the metals market spread to China in December. Prior to this, the Shanghai market had seen a decline, with trading volumes dropping for various base metals.

However, a wave of liquidity surged in the final months of 2025, as Chinese investors shifted to bullish positions. Aluminum trading reached its highest monthly figures in three years, nickel sales peaked in four years, and Shanghai copper contracts saw little activity since November 2015.

Remarkably, tin trading volume hit a record of 9 million tonnes in December, prompting a warning from the state-backed China Non-Ferrous Metals Industry Association against “blindly following the trend” with questionable price increases.

Speculative Behavior in the U.S.

Shanghai has a reputation for speculative excess driven by a large number of retail investors seeking quick profits. In contrast, there aren’t many individual investors in London who meet LME’s credit requirements.

Nonetheless, signs indicate that some speculators are starting to engage, albeit not in CME’s main copper contracts, but rather in smaller retail-focused products. The CME micro-copper contract, which is a fraction of the original size, saw volumes rise by 20% year-on-year to almost 4 million tonnes in 2025.

CME’s event option for copper also saw a trading volume of 31,000 lots in December, surpassing the total for all of 2024. These products, introduced in 2022, seem to connect retail investments in precious metals with those in industrial ones.

So, while the CNMIA is raising valid concerns about speculative behavior in less-traveled commodity markets like tin, the rising interest in industrial metals appears to be attracting an increasing number of new investors.