(Bloomberg) -- The London Metal Exchange suffered its second major outage in less than six months as trading was delayed by five hours by what the exchange described as a connectivity issue.
Electronic trading on the LMEselect platform failed to start at the normal time of 1 a.m. in London on Thursday and finally resumed at 6 a.m. The issue didn’t affect telephone trading, and has been resolved, the LME said in an e-mailed statement, without giving any further explanation.
The fault occurred at the start of the trading day in China, the world’s biggest consumer of metals. The electronic platform last stopped operating on July 22, halting trade for more than four hours in the morning. The exchange also cited a connectivity issue at that time.
“Traders are kind of getting used to LME trading halts,” Jia Zheng, a trader at Shanghai Minghong Investment Management Co., said by phone from Shanghai. “Most of the time, Chinese traders just wait until it opens. Unless there is big movement on the Shanghai futures exchange which leads to arbitrage trading opportunities. Then they will call to make trades.”
About $12 trillion of copper and other metals changed hands in 2015 on the LME, which shares the international market with exchange operators including the Chicago Mercantile Exchange and the Shanghai Futures Exchange. Last year, the LME’s trading volumes fell 7.7 percent.
Phone trading between brokers and clients 24 hours a day typically accounts for about 45 percent of all LME trading, with electronic and floor deals making up the rest, Chief Executive Officer Garry Jones said last year. The electronic platform runs until 7 p.m. in London while there’s ring trading from 11:40 a.m. through 5 p.m.
Copper futures advanced 1.7 percent to $5,808 a metric ton after trading resumed, while zinc and lead rose at least 1.5 percent.
(Updates with LME comment in second paragraph.)
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