The LME is introducing Minimum Volume Thresholds (MVTs) also known as block trades thresholds, applicable to certain instruments known as “LME Liquid Instruments".
LME Liquid Instruments
LME Liquid Instruments refer to the contracts and prompt dates that are subject to an MVT, as determined by the LME. These instruments were the subject of consultation in Notice 25/083 and outlined in Notice 25/149. Under the MVT rule, trades for LME Liquid Instruments that are below the appropriate threshold must be conducted on LMEselect.
LME Liquid Instruments consist of the most liquid base metals: primary aluminium, copper, lead, nickel and zinc.
The levels at which the MVTs apply to the LME Liquid Instruments are set out below.
| Metal | MVT (lots) |
| LME Aluminium | 15 |
| LME Copper | 10 |
| LME Lead | 10 |
| LME Nickel | 5 |
| LME Zinc | 10 |
The prompts to which the MVTs are applicable are:
- monthly outright (or 3-month) contracts out to month 6
- any spreads where both legs involve a monthly contract out to month 6, or
- 3-month contracts.
The MVT rule prohibits the execution in the inter-office market of agreed trades in instruments in scope of the MVT which are below the thresholds set out in the table above.
Examples of contracts in scope of MVT
This is not an exhaustive list of in-scope items, but provides additional clarity for the avoidance of doubt. The MVT rule will apply to agreed trades submitted to LMEsmart that are LME Liquid Instruments including:
- Inter-office trades
- Member-to-member trades
- Member-to-client trades
- Dollar denominated (trades that are executed in non-USD currencies cannot be converted (partially or fully) into USD if that USD trade is below MVT)
- ‘Current’ or ‘historic’ price type
- Normal and give-up trades
Illustrative example 1
In this example:
- a Client is trying to buy 8 lots of LME Copper 3M
- LME Copper 3M is a liquid instrument and therefore in scope of the MVT Rule
- the MVT for LME Copper is 10
- therefore, the Member has to execute the Client order on LMEselect.
The example shows the Member booked the Client trade in LMEsmart, without executing it on LMEselect.
This scenario is in breach of the MVT Rule as the Client trade is in scope of the MVT rule and below the MVT.
Illustrative example 2
In this example:
- a Client is trying to buy 8 lots of LME Copper Jun25
- LME Copper Jun25 is a Liquid Instrument and therefore in scope of the MVT Rule
- the MVT for LME Copper is 10
- therefore, the Member has to execute the Client order (buy 8 lots of LME Copper Jun25) on LMEselect.
The example shows the Member booked the Client trade in LMEsmart, after executing it on LMEselect, in line with the MVT rule.
This scenario is in scope of the MVT Rule as the Client Trade is below the MVT.
If the client order was 20 lots, it would have been above the MVT for copper and out of scope of the MVT rule. The Member can therefore choose how to execute this trade.
For more details and more examples on how the MVT rule works, please refer to the Blocks Guidance (PDF) and the accompanying document Examples to Support the Blocks Guidance (PDF).