ABSTRACT
At the annual round-table of the American Metal Market Forum of 1978, the audience of journalists asked Ian Forster, the chairman of the London Metal Exchange (LME) committee, if any link existed between the legal action of the European Commission and the concomitant launching of a futures market for aluminium at LME. This question rose from the news about a forthcoming contract for aluminium, which provoked much surprise amongst the market analysts. Actually, this operation was announced a few days after the delivery of the dossier of objections that the European antitrust authorities formulated against all the European aluminium producers, accusing them of cartel behaviour. A great change was predicted because LME and other commodity exchanges tried to start a futures market for this metal several times during the previous decades, enticing the strong opposition of the majors of this industry, of many governments, and also of users’ associations. Until then, it was believed that aluminium was different from other non-ferrous metals, which were historically traded through the LME device, because its long-lasting price stability made the hedging operations of a futures market needless. Behind the official announcement of the LME aluminium contracts, many observers thought that the intervention of the European Commission was the main cause of this change, which helped to curb the resistance both of governments and, above all, of producers in the transition of aluminium to the new model of trade. However Forster deluded the curiosity of his audience and, baffling the question, quickly replied: ‘Pure coincidence. If you want any more information, please chat with the EEC Commission lawyers’. 1
