Mr. Matthew Chamberlain, the CEO of the London Metal Exchange (LME), along with other LME executives, paid a visit to the Mercantile Exchange of Vietnam (MXV) on March 15, 2024. This visit marks the CEO's inaugural trip to MXV, highlighting Vietnam's growing influence in the global commodity trading landscape.

Significant growth in trading volume for metal products on LME

Established in 1877, LME is renowned as the largest exchange for metals globally. The exchange sees substantial daily trading volumes, particularly in commodities like aluminum, copper, lead, zinc, tin, and nickel. Metal prices quoted on LME are widely recognized as benchmarks for purchasing, selling, and delivering physical goods worldwide.

MXV has established official ties with LME since July 2021. The unique trading mechanism for metal commodities at LME sets it apart from standard futures contracts on other commodity exchanges. As a result, MXV and LME have collaborated on hosting extensive seminars to educate businesses and investors in Vietnam on effective trading strategies.

Mr. Nguyen Duc Dung – Corporate Vice President of Mercantile Exchange of Vietnam (MXV)

Mr. Nguyen Duc Dung, the Corporate Vice President of MXV, expressed that: “The trading volume of metal products interconnected with LME continues to experience steady growth. In Vietnam, businesses and investors have fully grasped LME's distinctive trading mechanism and consider these products a crucial component of their investment and hedging portfolios”.

MXV reports a consistent 3-5% average monthly growth rate in the trading volume of metal products interconnected with LME. Notably, the fourth quarter of 2023 witnessed a significant surge in trading volume, with domestic investors successfully matching nearly 5,000 metal contracts on the LME.

Highly potential market for precious metals

During the meeting, MXV and LME representatives collaborated to assess the efficiency of listing metal contracts for trading at MXV and outlined plans and strategies for enhancing the metal trading market in Vietnam in the near future. In light of the unpredictable global commodity markets, the strategies put forth by MXV and LME will aid businesses and investors in effectively hedge price risks.

Mr. Matthew Chamberlain emphasized that MXV is a crucial partner of LME in the Asia Pacific area. Given Vietnam's current potential and rapid growth, Vietnam is poised to emerge as the leading commodity trading market in the region.

Mr. Matthew Chamberlain, CEO of London Metal Exchange (LME)

Furthermore, representatives from the London Metal Exchange (LME) provided extensive details regarding the metal products they are offering, particularly emphasizing the significance of precious metal products. These products have garnered significant attention from global investors and hold immense potential for interconnected trading in the Vietnamese market.

"In the global market, precious metals such as gold, silver, and platinum are traded on Commodity Exchanges, just like any other commodities. Given the current upward trend in gold prices, the demand for transactions involving precious metals is expected to be substantial. From my perspective, Vietnam should promptly establish a Gold Exchange to cater to market demands and align with the prevailing global trend," expressed Mr. Matthew Chamberlain.

Metals and their role in achieving “Net Zero” goal

The recent 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held in Dubai has garnered significant global attention. Vietnam, like many other nations, cannot afford to ignore the undeniable and irreversible trends of green economic development, energy conversion, and emission reduction.

After the COP28, the significance of metals in renewable energy has been further emphasized as the world strives to achieve zero emissions by 2050. Metals such as copper, nickel, and zinc play a crucial role in the production of electric batteries and renewable energy sources. Consequently, metals are poised to become highly valuable resources akin to the "black gold" of the future, triggering a surge in prices and ushering in a super cycle of growth.

This presents a unique opportunity for businesses and investors to capitalize on this emerging trend and position themselves advantageously.

Representatives of MXV and LME in the meeting

MXV has dedicated significant efforts to researching and cataloging numerous products in line with the green economic development trend. Mr. Nguyen Duc Dung emphasized the invaluable role of shared experiences from LME in expediting the research and testing of these products in Vietnam. Furthermore, the involvement of LME consultants and international partners can facilitate the listing and trading of robust products with distinct characteristics that offer advantages to domestic businesses and investors.

To ensure the continuous advancement of the discussed products, MXV and LME have agreed to establish expert groups for ongoing research and development. Additionally, both parties will regularly organize seminars and discussions to stay updated on the latest knowledge pertaining to metal trading activities, as well as commodity trading activities in general.

Huong Nguyen