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The London Metal Exchange (LME), in a newly released discussion paper, says it will continue to take actions at the behest of many of its stakeholders to position “metals as the cornerstone of sustainability” in future economic activity.
“Population growth and the decarbonization of economies will both significantly increase the demand for metals, and the ability to meet this demand through sustainable means and technologies (including batteries, wind turbines and solar power) will be essential to enable a green future,” states the metals trading service.
In addition to supporting trading activities for metals used in batteries, such as nickel, cobalt and lithium, the LME comments in the paper, “Copper alone is used in more than eight clean energy generation and storage technologies.”
Recycling is mentioned frequently in the discussion paper, with the LME pointing to actions it has already announced while also stating that more recycling-related trading contracts are in the planning stages.
After pointing to sustainability-related factors affecting how aluminum, copper, nickel, lead, tin, zinc and cobalt are sourced and produced, the LME states, “All of these metals are highly recyclable. Work on the recycling of metals became mainstream during the 1970s, and Europe now recycles over 90 percent of metals from buildings and transport and 60 percent of metals from packaging.”
The LME adds, “These can be traded through the LME for specific brands of aluminum alloys and lead, as well as a specific scrap contract for steel; collectively, metals constitute a significant part of the circular economy.”
Looking ahead, the exchange says, “A United States-focused used beverage container (UBC) aluminum scrap contract is intended to address the sizable North American can manufacturing industry, and may have further relevance for price risk management for other recycled aluminum formats.”
The LME says it also intends to expand ferrous scrap contract offerings with an eye toward the international trade of the secondary commodity. “Since the launch of [the LME steel scrap contract] in 2015, the LME has been working with the steel industry to support the circular economy in the ferrous market. The LME now plans to add Taiwan and India scrap contracts to provide a set of tools to manage price risk for global flows of steel scrap products, positioning the LME at the center of the global steel scrap trade.”
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