LME Plans To Launch Yuan-Denominated Metals Futures Markets

In a sign the currency’s status in international finance is on the rise, and just a few short weeks after China unveiled its Yuan-denominated oil futures contract, the CEO of the London Metal Exchange has confirmed that it is planning to introduce yuan-denominated metal products.

As we noted recently, interest in China's yuan-denominated oil futures contract has soared since inception...the share of yuan contracts in global trading jumped to 12% compared to eight percent in March and 14% of WTI volume, up from 2% in April.

“The contract is thundering into action,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, as quoted by Reuters.

 “It makes sense for Iran to begin selling oil under contracts denominated in yuan rather than dollars.”

Which could explain why, as The South China Morning Post reports, LME CEO Matthew Chamberlain said in an interview in Hong Kong...

 “At present, investors are trading our products in US dollars. We would definitely like to explore the possibility of launching products denominated in offshore renminbi,”

The LME, owned by Hong Kong Exchanges and Clearing (HKEX), already allows traders to use the Chinese currency as collateral. HKEX last July has also introduced yuan-denominated gold futures.

Chamberlain could not say when the new products will be launched but he is confident yuan-denominated products would be popular because the currency has become more widely use in global finance.

Chinese investors are definitely very active customers at the LME. They are trading through mainland brokers who are members of the LME or western firms.”

“We believe with the increasing number of Chinese trading in our market, there would be more Chinese companies wishing to join the LME.”

Additionally, International Finance reports that Gary Cheung, chairman of the Hong Kong Securities Association, said:

Allowing Chinese manufacturers and investors to trade in yuan instead of the US dollar would reduce their currency risk. If the LME wants to attract more Chinese investors to its market, it makes perfect sense for it to launch the yuan metal contracts.”

Is the tide turning on the USDollar's reserve status? Remember, nothing lasts forever...

Even The World Bank's former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

"The dominance of the greenback is the root cause of global financial and economic crises," Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. "The solution to this is to replace the national currency with a global currency."

Comments

To Hell In A H… Thu, 05/24/2018 - 04:32 Permalink

Given the history of the LME, LBMA and their many offshoots, trusting this crooked entity is not a smart move, but what it does reveal is that this organisation recognises the winds of change and they are historically one of the first bodies to act and thus position themselves early. This tells me that they are acknowledging the dollar is DEAD!

  • How will Uncle scam adjust to negotiation and not being able to impose?
  • How will the Uncle Scam adjust to not being able to print at will?

The USSA is not going to give up dollar and petrodollar perks quietly. Not without a fight.

 

Uchtdorf Arnold Thu, 05/24/2018 - 07:25 Permalink

Great question. The Chinese may become the standard, but not the one for honesty. Human nature being what it is, those in power, financial or military, will seek only to augment that power. Without the wisdom of Jefferson or Madison in their DNA, the new Chinese leadership will likely be even more brutal than Mao.

In reply to by Arnold

BarkingCat Goodsport 1945 Thu, 05/24/2018 - 08:34 Permalink

The Chinese have a reputation for dishonesty. 

I know someone whose son has been trading commodities with the Chinese for a couple of decades.

According to him - never do anything on a handshake.  Their word is worthless.  Always get a written contract.  Be prepared for legal action to enforce the contract as they have this weird idea that signing a contract is the beginning of nagotiations.

In reply to by Goodsport 1945

Jack Oliver Thu, 05/24/2018 - 05:07 Permalink

We are witnessing the death of the American empire !! 

Just like the fall of the Roman Empire !! 

Rome devalued the currency by putting less silver in the coins - The US has devalued the currency by printing copious amounts of the SHIT ! 

Nero ‘fiddled’ while Rome burned - actually the ‘fiddle’ hadn’t been invented in 68AD ! 

Nero played the ‘lyre’ - US politicians play the ‘liar’ ! 

The coincidences don’t end there - Nero’s last words ( In his ‘narcissistic sociopathic’ state ) - before taking his OWN life - were

“ What an artist dies in me “ 

When MSM dies - their last words will be “What a BULLSHIT artist dies in me”  

History repeats !! 

 

 

 

Vuke Jack Oliver Thu, 05/24/2018 - 06:21 Permalink

Maybe not an exact repetition but it does rhyme. In 415 BC Athens sent its fleet and many troops to invade far off Sicily a failure which swiftly led to the collapse of the Athenian Empire.

I predicted much the same when the U.S. embarked on its Middle East invasions. In Sicily Athens lost its fleet while the U.S. is in the process of losing its fiat world reserve status.  Even the timing is similar, ten to twenty years.

From Wiki:  The defeat proved to be the turning point in the Peloponnesian War, though Athens struggled on for another decade. Thucydides observed that contemporary Greeks were shocked not that Athens eventually fell after the defeat, but rather that it fought on for as long as it did, so devastating were the losses suffered.

In reply to by Jack Oliver

Vuke lakecity55 Thu, 05/24/2018 - 10:00 Permalink

Good points on the Brits Lakecity and good points on the ruble and yuan as their rise is inevitable.  I need a hand truck to move my silver so in a catastrophe things could get tough. But I think what we'll see is a decline in the dollar as the Chinese and Europeans play along in trade, then a staggering decline with rampant inflation.  How else to discharge a $22 Trillion debt?  Pay it off?

Things will get really rough if the Fed ramps up rates as they did in 80's to stabilize the "new" dollar but wages will begin to soar as they did then. But it took a good 5 years of tough slogging. 

Let's hope no nut starts a new war.

 

In reply to by lakecity55

Jack Oliver Madcow Kaczynski Thu, 05/24/2018 - 07:31 Permalink

You are right about the real estate - After this is all over - China will be be buying up foreign agricultural land ! 

Here in Australia - China has bought a lot of land ( and they can make it rain ). 

Most people have no idea how Monsanto has created ‘dependency’ on their poisons ! 

I took some time out a few years ago and discovered that Monsanto is a big slice of Australian farms ‘outgoings’ ( around 30% in some cases) 

Indian farmers are committing suicide over the same problem !! Russia has banned Monsanto and Putin boasts full ‘organic’ produce !  

If we are to survive and prosper as a species - well - we must collectively embrace change for the better ! 

 

In reply to by Madcow Kaczynski

The.Lizard.Joshua Jack Oliver Thu, 05/24/2018 - 09:05 Permalink

And Monsanto is controlled by the Rothchilds who also control the Fed.

Between the two it is economical and biological warfare against the American people. We are all enemies of the Fed.

What I'm trying to figure out is what drives so many of the elites to think the world is overpopulated and that any further population growth will make human life unsustsinable?  Did they just watch Soil ent Green too many times or what?  Every population boom in history has resulted in breakthroughs in cultivation.  Every human being on the planet could fit in Texas with enough space to give them each a small room but the bloodthirst of the Anglo American elites is insatiable.  Not just the whites either.  Oprah is huge on population control.  We would all live longer and stay healthier if we just ate the rich.

Putin had the right idea too.  He banned the Rothchilds and the poisons they pedal

In reply to by Jack Oliver

foxenburg Thu, 05/24/2018 - 05:16 Permalink

This is too much! I think Pompeo should just tell everyone they'll use dollars - or else. Nikki could maybe announce at the UN that anyone using Yuan - "We are taking names!" 

Byte Me Thu, 05/24/2018 - 05:49 Permalink

This "graph" that ZH keeps trotting out implying that reserve status changes in step functions is ludicrous.

It might be 'different this time' - with a crisis being so severe as to manifest as a step function, but seriously, the crown is being passed.

Reserve currencies usually fade away.

Easyp Thu, 05/24/2018 - 05:57 Permalink

Paper money  that is subject to political manipulation and QE is worth what?  Unless fiat money is backed by a commodity and legally protected from political manipulation its worth shit in the long term.  Yes I have cash for day to day purchases but assets are in the family home, shares and physical metal.

Silver Savior Thu, 05/24/2018 - 10:29 Permalink

I have been talking about the collapse of the dollar atleast since 2014 on cnbc. Few people seemed impressed. Now as I scroll through the comments it seems like 90% of people are now catching on.

Good work!