If an option is not declared and exercised, it is abandoned.
Associate Broker Clearing Member of the LME.
American Bureau of Metal Statistics. Issues non-ferrous metal statistics.
Australian Bureau of Agricultural and Resource Economics. Issues statistics and reports.
Acid lining
In steelmaking the type of refractory furnace lining influences the type of steel produced. Type of acid refractory lining (e.g. silica) for a steel blast furnace or melting furnace. See also Basic.
Acronym for aluminium conductor steel reinforced. The standard material for stringing high-voltage overhead power lines.
US term for physical.
Horizontal access shaft to a deposit inside a mountain.
Ad Valorem
Latin. According to the value. Basis for many customs tariffs
Across the flats. A measure of hexagonal bar.
Automated gauge control. Computerised control of the gap between the rolls of a rolling mill to keep metal thickness consistent.
Age hardening
A process of allowing certain alloys, notably of aluminium and some steels, that exhibit this characteristic to return to a hardened state after annealing by leaving them for a few hours or days at room temperature. See also Maraging and Air Hardening.
Air hardening steel
Heat treatable steel which does not require quenching after heating. See age hardening.
Air tabling
A process for sorting scrap from waste. Air is blown through holes in a horizontal surface to lift a lighter fraction (e.g. plastic) from metal. See also Chopping. Also used occasionally for ore beneficiation.
American Institute of Mining and Metallurgical Engineers. Influential trade body.
American Iron and Steel Institute. Issues iron and steel statistics and reports.
A sandwich of high-strength aluminium alloy sheet between two sheets of commercially pure metal for a combination of strength and corrosion resistance. Produced by rolling.
A strategy for short-term trading on volatile markets, notably futures and options, which can be automatically executed by computer. Programmes are often very complex.
Algo trading
See algorithm.
Alkaline earth metals
Group of metals in the periodic table beryllium, calcium, strontium, barium and radium.
A combination of two or more metals with its own distinct properties.
Alluvial deposit
Earth, sand or gravel, sometimes bearing metallic minerals, which has been washed down from the original source by water action. (See also Eluvial).
An alloy containing aluminium nickel and cobalt. The original high-strength permanent-
magnet alloy.
Oxide of aluminium. Usually produced from bauxite as a first stage in the manufacture of aluminium. About two tons of alumina make one ton of metal. Also a refractory and an abrasive.
A process which exploits the exothermic characteristics of finely-divided aluminium and/or ferro-silicon to generate high temperatures on combustion. Used in the production of some refractory metals and ferro-alloys, also for welding. See also Thermit.
Coating steel with aluminium. Has similar results to galvanizing with the added advantage of heat resistance, e.g. on exhaust systems.
American spelling of aluminium.
Aluminum Association
US industry association. Issues standard specifications used worldwide.
Aluminium bronze
An alloy of 89-95% copper and 5-11% aluminium with good bearing properties. Used for bushes and moving parts.
A combination of mercury with another metal without the application of heat.
American option
An option, normally an OTC option on physical, which can be declared at any time prior to expiration.
Ammonium metavanadate. One of the forms in which vanadium is traded internationally.
Standard long product in steel, aluminium and other metals. The arms of the angle may be equal or unequal.
A process of heat treatment for restoring the ductility of metals work-hardened by
A cast, flat fire-refined shape used as the raw material in electrolytic refining. Alternatively the inert positive terminal in electrolysis.
A process of improving the corrosion resistance of aluminium by thickening the natural oxide film on the surface. The coating may be coloured with dyes or integrally in a few colours by tailoring the composition of the alloy treated.
Geologists study magnetic or geophysical surveys for anomalies as the first indication of a possible ore deposit.
Special tariff or other constraint on imports deemed by the importing country to be guilty of dumping.
Argon oxygen decarburisation. A special steelmaking process used in stainless and high-alloy steel production.
American Petroleum Institute. Sets some standards for oil pipe.
Ammonium paratungstate – principal form in which tungsten is traded internationally.
An operation to lock in a temporary price advantage which involves a purchase of metal in one market with the simultaneous sale of an equivalent quantity of the same metal in another market, (eg copper on the LME and Comex). If two currencies are involved, a foreign exchange hedge is also needed to protect against any change in the parities.
A formal dispute resolution mechanism, usually provided by a body such as a Chamber of Commerce or the LME. Provision for arbitration is usually written into the contract to avoid the necessity for litigation.
Asian option
A cash-settled option on the average price of a given metal in a given averaging period, usually a month. Automatically exercised if in the money. See also Tapo.
The independent evaluation of the physicochemical composition of a metal or alloy to determine its degree of purity. Also to establish the metal content of ore or scrap. Also international standards, and some standards peculiar to futures market contracts, specify metal contents and maximum levels of impurity. Metals and ores are assayed to establish if they meet these.
On the LME, a notification from the clearing house that an option grantor must fulfil the terms of an option.
Associate Broker Clearing Member (ABCM for short).
A clearing broker member of the LME without Ring dealing privileges.
Associate Trade Clearing Member
A member of the LME entitled to clear its own business, but not to write client contracts or trade in the Ring.
Associate broker
Non-clearing, non-Ring-dealing members of the LME authorised to issue LME contracts.
Associate Trade Members
Members of the LME who are purely clients of broking members.
American Society for Testing and Materials. US standards organisation.
At arm’s length
A transaction between two unrelated parties. A transaction between financially-linked companies cannot be at arm’s length.
An option whose strike price is the same as the current market price of the underlying metal.
Audit trail
A regulatory requirement for records to track the progress of a futures market order. Also a similar provision in many branches of accounting.
A major class of alloy steel, especially stainless. Classically 18%Cr 8%Ni, the latter is ductile, easily welded and work hardens. May contain molybdenum. See also Ferritic.
Authorised dealer
An individual authorised to deal on the floor of the LME for a Ring dealing broker. See also Clerk.
Autogenous grinding
A ball mill without the balls, where the ore is ground by impact on itself.
Automatic exercise
See Asian Option.


Back office
The department in a brokerage or trading house where financial transactions such as futures deals are processed to ensure their fulfilment. See Matching and Clearing.
The situation when the cash or spot price of a metal is greater than its forward price. A backwardation occurs when a tight nearby situation exists in a metal. The size of the backwardation is determined by differences between supply/demand factors in the nearby positions compared with the same factors on the forward position. There is no inherent limit to a backwardation. The backwardation is also referred to as the ‘back’. A large and widening backwardation can reflect a squeeze and ultimately a corner – situations which the LME has powers to combat. See also contango.
Part of the environmental controls at a smelter or furnace. Cooled flue gases are passed through the baghouse to capture particulates, which may then be recycled.
Ball mill
A rotating cylinder loaded with balls of iron or other material used to fine-grind ore in a concentrator prior to flotation. See also rod mill and autogenous grinding.
The measure of a futures market’s ability to process deals executed over an electronic platform.
A long product in a non-ferrous or ferrous metal of rectangular, or sometimes circular, cross-section, normally over 10mm thick and up to 300mm wide. Not to be confused with Rebar.
Base metals
Major industrial non-ferrous metals other than precious metals and minor metals. See also Noble metals.
Basic lining
In steelmaking the type of refractory furnace lining influences the type of steel produced. Basic refractory is magnesite or dolomite, the opposite of acid lining.
(i) Jargon term for the difference between a futures price and the price of the underlying asset. Also used for the difference between any pair of financial indicators. (ii) Mostly in zinc concentrates contracts, a metal price to which the Treatment Charge is understood to be linked. If LME prices move too far from the basis, a scale of variation is applied to the Treatment Charge. See also escalator. (iii) In some ores and ferro-alloys the nominal content of the valuable metal. Variations from this nominal level in actual delivery are reflected in the price on an agreed scale.
Basis point
A measure of tiny movements in futures and other volatile prices and yields equal to 0.01% of the going price.
Basis price
(i) The price agreed between the seller and the buyer of an option at which the option can be exercised. This price is also called the strike price. (ii) See also under Basis the pricing system in some ores and ferro-alloys called basis and scale.
Aluminium trihydrate, the most common raw material for the production of alumina. Roughly two tons of bauxite make one ton of alumina.
Consortium of seven Indonesian tin smelters.
(i) The width of a vessel; may govern which harbours or canals it can enter. (ii) A steel or sometimes aluminium structural.
One who believes prices will move lower.
Bear covering
The closing of a short position.
Bear market
A market in which prices are declining.
Bear position
One where the trader has sold metal for forward delivery (i.e. going short) with the view to buying back at a lower price, his profit being the difference between the sale and repurchase price.
Bear spread
An option spread of either puts or calls whereby the holder of the position benefits when prices fall.
A pricing mechanism used predominantly in ores and alloys markets. Many markets hitherto using benchmarks now use quarterly contract negotiations. A benchmark price is agreed by a major organisation or group of organisations on the supply and consumption side. This price is then used by market participants in the rest of the relevant industry as a reference for their own pricing negotiations. There may be local premiums or discounts applied to the benchmark to reflect quality or freight differentials. Benchmark prices were usually agreed on an annual basis, but sometimes are negotiated on a quarterly basis now.
Beryllium copper
Copper with a small addition of beryllium used for springs and non-sparking tools.
Bessemer steel
The original 19th century steel produced by blowing air through molten steel in a converter.
Best orders
Orders to buy or sell which the LME Ring-dealing broker executes on the market at what the dealer judges to be the best available price. It is also termed buying (or selling) ‘at best’. Becoming less common.
A measurement useful in option pricing of the difference in volatility between an individual commodity and the market in general.
The price the buyer is prepared to pay. (Also see Offer).
Bill of Lading
Legal document issued by shipowner covering receipt of cargo and shipment conditions.
(i) In steel, a long product of square cross-section used for rolling into finished shape as a rebar or light long product; the form in which steel is traded on the LME. (ii) In non-ferrous (mostly aluminium and brass) a cylindrical shape for use in an extrusion press; or in a piercing machine as the start of solid-drawn tube production.
The result of the fusion – usually under pressure and heat – of strips of two different metals or alloys. The resulting strip bends in response to temperature change; the heart of a thermostat.
Binary alloy
An alloy of two metals.
Bureau of International Recycling. International scrap metal trade association.
Abbreviation of Bill of Lading.
Black copper
A very impure (85-90%) first smelting of copper prior to fire refining.
Black Jack
A mining term for zinc blende (zinc sulphide).
Black ore
Colloquial term for wolframite (tungsten ore). Scheelite (a calcium tungstate mineral) is white.
Cold rolled, light-gauge steel commonly used as the base (substrate) for tinplate and other tin mill products.
A formula (named after its two inventors) which relates the premium value of an option to a combination of the value of the underlying metal, the time to expiry, the volatility of the metal’s price and the prevailing interest rate.
Black tin
Mining term for cassiterite (tin ore).
Blast furnace
A furnace in which a mixture of ore and coke is raised to a high temperature by blowing air in at the bottom. Metal and slag are continuously tapped from the bottom and fresh charge is added at the top. Mainly used for iron, mostly then used to make steel, and lead.
An old-fashioned word for ore, usually used with zinc or lead.
Blister copper
Crude copper assaying 96-99% Copper prior to final fire refining.
Block trade
A large transaction in one metal on one futures market.
Steel semi for rolling into other semi-finished and finished products. Generally considered an antiquated method of casting crude steel.
Basic oxygen furnace. Oxygen-blown steelmaking furnace with basic refractory lining.
Term mostly used on the LME. Derived from ‘borrowing metal from the market’, which is achieved by buying a nearby date and simultaneously selling a date further forward. See also Cash and Carry and Lending.
A mark or name identifying the smelter, refiner, semifabricator or steelworks who has produced the metal. In primary metals often associated with a declared full chemical analysis. The deliverability of metals on the LME is mostly controlled by brand.
A family of copper-zinc alloys, classically 60/40. Variations in composition give different colours and physical characteristics.
Brazing brass
An alloy of 50% copper, 50% zinc used for joining iron and steel at a lower temperature than welding.
Acronym for Brazil, Russia, India and China.
(i) For a trader, a transaction that produces neither profit nor loss. (ii) For a producer a level of price which clears his operating costs. (iii) For a semifabricator or ingot maker, a difference between his raw material cost and product selling price that exactly covers his operating costs.
Bright drawn steel
Long products such as bar are sometimes drawn after rolling to achieve greater dimensional accuracy and a bright finish.
The standard test for hardness of metal. The higher the Brinell number, the harder the metal.
(i) In ferro-alloys a briquette is a granular form of the alloy held together with a binder and contains an exact amount of the alloying metal. (ii) In scrap processing, particulate material (e.g. chopped cable, swarf) is briquetted under pressure to reduce surface area and increase density for charging to the furnace. Briquettes are colloquially known as bricks. See also pellets.
One who puts buyer and seller in touch with one another for a fee. In a broader sense the term is used for an organisation which is a member of an exchange and which acts as the means through which clients have access to the market. In these circumstances the broker acts as principal to his client but does not share in the risk as each deal is implemented by trading with other brokers in the market through clearing.
(i) Commission charged by a broker for completing a transaction on an exchange. (ii) Less commonly a similar fee for facilitating a physical transaction. See also Commission House.
An alloy of 90% copper 10% tin. Variants are aluminium bronze and manganese bronze; the latter is better known as High Tensile Brass.
British Standard. Standards may cover purity, composition, physical properties, dimensions or all of the foregoing.
British Standards Institution. Issues British Standards.
Bulk ores
Ores shipped in very large volume without packing – mainly iron and managanese.
One who believes prices will rise.
Bull market
A market in which prices are rising.
Bull position
One where the trader has bought metal with a view to selling it later after prices have risen to higher levels (i.e. going long), his profit being the difference between the purchase and sale prices.
Bull spread
An option spread of either puts or calls whereby the holder of the position benefits when prices rise.
(i) Precious metals such as gold and silver, in unwrought form. (ii) Lead bullion is smelted, unrefined lead which still contains silver.
A rigid or flexible electrical connection for conveying heavy current to a furnace, aluminium smelting cell or electro refinery. Usually made of copper or aluminium.
Business day
Any day except holy or weekend days, a public/bank holiday or, on the LME, a day designated not to be by the LME directors. See also she and shinc.
Butterfly spread
An option strategy combining two option spreads whereby two options are bought (or sold) at the same strike price and one option is sold (or bought) at each of an equidistant higher and lower strike price, all for the same expiration. It is a limited-profit, limited-risk options strategy.
Buyers over
If a bidder remains unsatisfied at the end of any ring on the LME, or trading session on other futures markets, there are said to be buyers over. If this is so in cash or three months at the end of the second LME morning ring, the bid price will be the official buyer’s price for that position.
Buyer’s price
See seller’s price and buyers over.
Buying hedge
A hedge transaction involving the purchase of a futures contract to offset a short physical position and the risk of a rise in the metal price. See hedging.
A metal or other valuable element recovered in relatively small quantities from the production of another metal, e.g cadmium from zinc, platinum from nickel or molybdenum from copper.


Cadmium copper
Copper with a small addition of cadmium for greater strength. Standard metal for overhead conductor on electric railways.
Usually refers to copper. Rectangular shapes suitable for rolling into plate, sheet etc.
Calendar spread
An option spread whereby a pair of calls or puts for the same strike price but different expiration is traded simultaneously, one bought and one sold.
Call option
See option.
A calot (in zinc) or slug (in aluminium) is a thick disc of soft metal which is the raw material for an impact extrusion (e.g. collapsible (aluminium) tube for toothpaste).
Cancelled warrant
Cancelled warrants are important in that they represent the change in stockpiles of metal that may no longer be available at LME warehouses and is booked for removal or onward shipment. This information is an indicator of physical demand.
A derivative position that protects the holder from any cost of a rise in the price of the underlying above an agreed level. See also Floor.
A large cargo vessel of typically 150,000 tonnes deadweight originally too large to go through the Suez Canal.
The measure of purity of gold. 24 carat is 100% Au.
Carbon steel
Ordinary unalloyed steel.
(i) Carrying is the general term used for both borrowing and lending on the LME. (ii) It is also used to describe a borrowing operation which results in physical metal being held in an LME warehouse by the borrower. (iii) Beyond metals, carry trades are made in other financial instruments.
Carrying costs
The costs associated with a carry such as insurance, rent and opportunity cost.
Case hardening
Hardening the surface of steel without affecting the core metal.
(i) On the LME, the spot position for trading (with settlement on the second following day). (ii) On other futures markets, cash usually refers to physical. See also Cash settlement.
Cash settlement
Some futures contracts can only be settled in cash and not by delivery of a warrant or lot.
Cash and carry
When a contango exists, the premium of the forward position over the prompt generally reflects costs of storage, insurance and finance for that period. When metal is in surplus the contango may widen to the point where an effective interest at more than money market rates can be locked in. (See also Borrowing).
Cash today
See Tom-Next.
The principal commercial ore of tin.
See Foundry.
(i) The product of a foundry. Molten metal is poured into a mould to produce the desired finished shape, often complex. Castings are mostly made of iron, steel, aluminium, copper alloys and zinc, but most metals can be cast. They may be sand-cast, gravity die cast, pressure die cast or, more rarely, cast by the lost wax process. The structure of cast metal is different from that of wrought metal. (ii) The process of casting steel in a continuous process.
An element or compound which facilitates a chemical reaction without itself being consumed or altered. Classic examples are platinum in oil refining or Raney nickel in edible oils manufacture. Automotive catalysts are an important application of precious metals to reduce exhaust gas emissions.
LME members are divided into five categories – Ring Dealing, ABCM, Associate Trade Clearing, Associate Broker and Associate Trade.
A flat rectangular piece of metal which has been refined by electrolysis or electrowinning. Copper and nickel are commonly traded and delivered in this form. Copper is always traded as whole plates. Nickel may be whole plates or cut into squares of various sizes down to 1in.x1in. Cobalt cathode is traded as chips.
Cathodic protection
Where two metals of different electro potential are in contact in moisture, the (sacrificial) one with higher potential corrodes faster and in so doing protects the other. Galvanizing works this way.
Central counterparty, i.e. a clearing house. See also Novation.
Continuous cast rod. See Properzi.
Cement copper
An impure form of copper recovered by acid precipitation from low grade ore or residues on to steel scrap. This is then smelted. See also heap leaching.
Cerium Mischmetal
See rare earths
Certificate of Origin
A consular document certifying the origin of a material. Important where some origins are embargoed or subject to anti-dumping duty.
Short for cost and freight. Material sold cfr is delivered free to port of destination, but not insured. Sometimes expressed as c&f. See cif.
Charcoal iron
Iron smelted with charcoal rather than coke where the former is available and the latter is not economic. May yield a purer iron.
Charge chrome
The largest-tonnage form of ferro-chrome with slightly lower chromium and carbon contents than high carbon (which has 60%Cr and 6-8%C).
Market analyst who uses charts of price behaviour to predict price movements. Also called technical analysis. The opposite of a study of fundamentals such as production, consumption and macroeconomic data.
Chemical lead
High-purity lead suitable to resist corrosion in, for example, sulphuric acid. Confusingly called corroding lead in the USA.
Cable chopping or granulation is a process of preparing scrap cable without burning. Wire and insulation in small pieces are then separated, usually by air tabling.
Cire perdu
See lost wax.
Cost insurance and freight. Material sold cif is free of all charges to the buyer up to the vessel being alongside at the port of importation.
Commonwealth of Independent States.
Clad metals
These are metals whose surface characteristics have been changed by bonding a thin sheet of another metal to one or both sides by rolling pressure or even explosion. See also Alclad and Sheffield plate. Not to be confused with surface treatment processes like galvanizing, anodising or electroplating.
(i) Generally, the process of transferring futures and options contracts to a clearing house and holding them there. In full CCP clearing, the clearing house, through the process of novation, protects both participants to the trade from counterparty risk. This is usually done soon after a trade is executed and certainly every day. (ii) On the LME the daily process of settling all the differences between Ring members’ positions and settlement at the end of the day’s trading. It is implemented through the clearing house and closes all the previous day’s contracts.
Clearing house
An independent body appointed or owned by an exchange to clear and guarantee business transacted between member brokers. The LME’s clearing house is LCHClearnet.
An assistant to an LME Ring dealer. He or she may be ‘authorised’ (empowered to deal in the absence of the dealer) or ‘unauthorised’ (empowered only to record and check transactions).
Commodity Futures Trading Commission. US body responsible for regulatory oversight of all futures and commodity options trading.
Closing price
(i) On the LME a price set by the Quotations Committee at the close of business for the purpose of assessing margin payments due. Not to be confused with settlement. (ii) On other futures exchanges the value prevailing at the end of the day’s trading which becomes the official price for that exchange for that day.
Close out
See liquidate.
CME Group
The world’s largest futures markets operator, formed from the merger of the Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBOT) and New York Mercantile Exchange (Nymex).
Cobbed ore
Ore which has been hand-sorted lump by lump.
Sheet metal is coiled up as it emerges from the rolling mill and is then normally strapped and sold in this form. In steel, hot rolled coil (HRC) is sold to independent cold rollers who sell CRC, or cold rolled in-house by vertically integrated mills. Vertical integration of hot and cold rolling is more normal in non-ferrous metals, as is continuous casting at the start of the process.
Coinage bronze
An alloy classically of 95% copper, 4% tin and 1% zinc.
Coking plant
A plant for converting metallurgical grade coal to coke for use in blast furnaces.
The New York Commodity Exchange, on which copper, aluminium, gold and silver are traded. Comex is often referred to as meaning the prices of these metals in New York, e.g. ‘Comex is $3.50’, meaning the Comex copper price is $3.50 a lb. Nymex – the New York Mercantile Exchange, which owned Comex when it was absorbed into CME Group – trades platinum futures.
Commercially flat
The degree of flatness of plate or sheet which is commercially accepted.
The fee paid by a client to a broker for executing a futures transaction.
Commission house
A term referring to brokerage houses, usually American, which execute general commissionable business on behalf of clients in securities and futures.
The first-processed product from a mine. Processes such as flotation, magnetic separation or spirals raise the metal content from as-mined levels to as much as 60-80 times richer. Loosely referred to as ore.
The situation when the price of a metal for forward or future delivery is greater than the cash or spot price of the metal. Contangos occur when the metal is in plentiful supply. The size of the contango does not normally exceed the cost of financing, insuring and storing the metal over the future delivery period. See also Cash and Carry and Backwardation.
Continuous casting
A process of casting a product, such as a rolling slab or extrusion billet, through an open-ended die in which it is rapidly frozen. Strictly speaking this is semi-continuous casting. See also Hazelett and Properzi.
A legal document setting out the respective responsibilities of buyer and seller or client and broker in relation to a transaction or series of transactions. On many futures markets the standard trading unit is called a contract, but also lot or warrant.
Contract month
On futures exchanges other than the LME a month in which the material is deliverable. There is not necessarily a delivery month every month. The nearest month is known as the spot month.
A furnace for refining steel, copper etc. by blowing air through the molten metal.
Generic term for companies converting steel alloying ores into intermediates such as ferro-alloys, molybdenum oxide or ammonium paratungstate (APT).
Usually two metals recovered from the same ore and near enough to each other in value that neither can be called a by-product of the other.
A position where one operator owns all or virtually all the market stocks of a commodity. His object is to control the supply of the metal, and thus cause an exceptional rise in price. The LME has rules to avert the worst effects of a corner. (See also Squeeze).
A corrosion-resistant weathering steel.
Counterparty risk
The risk that a counterparty to a trade will fail to fulfil its obligations.
The balancing of an open position by buying (if the original position was short) or selling (if the original position was long) on the market.
Cold rolled. A process used to fine-tune the surface finish and dimensional tolerance of hot rolled steel. Also to change cross-sectional shape.
See coil.
(i) The tolerance extended by a seller to the buyer for the time he takes to settle invoices. (ii) On the LME brokers extend credit to the client from which they then draw variation margin, thus avoiding frequent margin calls.
Credit limit
The maximum amount of credit an LME broker will extend to a client to meet margin calls. See also credit.
A metal which slowly deforms under pressure or tension is said to creep. Lead creeps at room temperature, mild steel creeps at elevated temperature.
(i) A cleared transaction where the buyer and seller are the same broker. On the LME the normal means of creating the futures contract to settle an in-the-money Tapo. (ii) On other markets the expression is sometimes used to cover a situation where bid and offer prices temporarily become inverted.
Crude steel
The first solid steel product upon solidification of liquid steel. It includes ingots and semis. Crude steel also includes liquid steel which goes into production of steel castings.
Refractory pot in which smaller quantities of metals and alloys are melted prior to final adjustment of the composition and pouring. Traditionally used to make tool steel, now mostly used for preparing metal for casting in the foundry.
As-mined rock is crushed to progressively smaller sizes on its way to milling and flotation. The first and most powerful crushers are jaw crushers, followed by the gyratory or roll type.
The science of extreme cold. Used to process extreme oversize or plastic-covered scrap by embrittling it.
Commodity Trading Advisor – a firm or more likely an individual who uses charts and system trading to trade on futures markets on behalf of managed investment funds. See also Algorithm.
Separation of base metals from precious metals by oxidation of the former. The oxides are absorbed by a cupel (a dish of bone ash); the precious metal remains as a bead on the cupel. A technique used in assaying.
A smaller melting furnace, typically used by a foundry to melt iron or scrap.
Custom smelter
In non-ferrous, a smelter which depends for its intake mostly on concentrate purchased from independent mines and on scrap metal, rather than its own captive mine sources. See also Toll.
Copper with about 30% nickel. Used for coinage


delivered at frontier.
Day order (GFD)
An order placed with an LME broker which is valid throughout the rings and kerbs during the day on which it was placed. If not executed that day, it is automatically cancelled. If valid for all markets (i.e. premarket, lunchtime and evenings as well as the rings and kerbs), any instruction should clearly state ‘all markets’. The order can then be executed at any time of the day by telephone or electronically.
Day trader
A trader, usually an independent individual, who buys and sells a futures contract on the same day for a small profit. Often encountered on US futures markets, where they are known as locals. See also Intraday.
Short for deformed bar. A rebar that has been deformed to grip better in concrete.
Dubai Gold and Commodities Exchange.
Abbreviation for delivered.
Delivered duty paid.
Delivered duty unpaid.
The act of an option buyer informing an option grantor that he is taking up his right to buy (or sell) metal under the option contract.
Declaration date
The date on which the buyer’s right to exercise his option expires if not declared. On the LME this is the first Wednesday in the month or, if a holiday, the next business day. There is no declaration date for a Tapo.
In a concentrates purchase or toll-smelting contract, provision is made for a smelter to make a deduction for unavoidable metallurgical losses before accounting to the seller for the metal recovered.
A delivered price includes free delivery to the buyer’s works or warehouse, including, unless otherwise specified, any import duty. See also ddp/ddu.
Supply of material in accordance with the terms of a contract. On the LME this may be effected through supplying a warrant or on other futures markets a similar document of title. In the USA often referred to as shipment.
Delivery date or Prompt date
The date on which a metal has to be delivered to fulfil the contract terms.
A measure of the rate of change in an option premium against changes in the price of the underlying commodity. Often used as shorthand for price exposure in an option dealer’s position.
Penalties payable to a shipowner for delays if loading or unloading does not proceed at the rate laid down in the contract. May arise from landside transport problems, port congestion or weather.
(i) Dendrites are whiskery growths on anodes which can short out the electrolytic process. (ii) Also used to characterise geological formations.
See Initial Margin.
Generic term originating from the financial sector for all contracts related to an underlying security or commodity, whether or not they are traded on a futures exchange.
In LME clearing, contracts are concluded at maturity by the payment into settlement by the broker, or from settlement to the broker, on behalf of his client, of the difference between his closed contract price and the corresponding settlement price.
Die casting
Casting a non-ferrous metal (usually zinc or aluminium) into a closed steel die either by gravity pouring (gravity die casting) or injection under pressure (pressure die casting). More accurate and faster than sand casting.
Deutsche Industrie Norm – German standards
Direct strip casting
Casting steel strip very close to final dimensions to minimise the need for subsequent hot rolling to size (from conventional slab).
Discretionary account
An account which gives the broker the right to initiate trades that he believes will meet the client’s objectives. More common in equities than futures.
Defense National Stockpile Center. US Government agency responsible for selling metals and ores from US stockpile surpluses.
Short for drawn over mandrel. Steel industry term for solid drawn tube.
Double option
An option – sometimes known as a straddle – which gives the buyer or taker of the option the right either to buy from or sell to the seller (or grantor) of the option at the basis price.
The depth of water necessary for a vessel to float without fouling the bottom.
The refund of customs import duty on the re-export of the goods or export of products made from them.
The process of drawing metal through a die to accurately produce long lengths of wire, tube or strip sections.
Alluvial deposits, notably of tin, are often mined by dredges which float on artificial or natural shallow waters (pond), dredge up the mineral and concentrate it on board with spirals, shaking tables etc. Dredging in front of the dredge and depositing tailings behind it moves the pond across the deposit.
Direct reduced iron. An alternative to the blast furnace in which iron ore or pellets are heated by a reducing gas. The product contains up to 90% Fe. Subsequently charged to an EAF to make steel.
Partly oxidised scum floating on the top of molten metal. After skimming off may be processed to recover its metal value.
Dry metric ton
In some contracts covering concentrates or bulk ores, the relevant tonnage is specified as dry – i.e. after deducting the moisture content.
Exporting goods to another country at lower prices than on the home market or in third markets. See also anti-dumping.
Dual phase steels
Carbon or stainless steel designed to be ductile enough for deep drawing but having superior strength thereafter.
Ductile iron
See SG iron.
Duplex stainless steel
A fast-growing class of stainless steels. So-called because it is a combination of austenitic and ferritic types, with intermediate nickel content. Good for high strength applications.
Deadweight tons. The tonnage capacity of a vessel.


Electric arc furnace. Mostly used for melting steel scrap or iron. See also Electric resistance furnace.
Exchange for futures – a transaction whereby an off-exchange contract is exchanged for an on-exchange one.
Exchange for physical – a term originating on American futures exchanges, but now increasingly in common use on the LME, whereby two physical counterparties swap a physical parcel and a futures position at mutually agreed prices to avoid each of them having to hedge the transaction separately.
Electric resistance furnace
Electric furnace for smelting ferro-alloys where heating is achieved through resistance to the passage of the current from carbon electrodes through the charge, as well as from arcing. May be slowly rotated. See also EAF.
Electrical steel
Steel for use in laminations in electric motors, transformers etc. See also Grain oriented. Electrode See electrolysis and electric resistance furnace.
(i) A process by which direct current passes from one electrode (the anode) through a liquid electrolyte to another electrode (the cathode) in a cell. The passage of ions from the anode causes the pure metal only to be electrodeposited on the cathode. Because of the purity of the deposited metal, electrolysis is often used in refining. Impurities fall to the bottom of the cell as a slime and may contain valuable by-products, such as precious metals. (ii) Also used for electroplating corrosion-resistant metals such as silver, nickel and chromium on tarnishable metals such as steel or brass. See also electrowinning.
See electrolysis.
Electronic trading
Mostly refers to trading on a futures market on an electronic platform such as the LME’s Select or a proprietary system. Also some physical trading is done electronically.
See electrolysis.
An electrolytic refining process in which the metal is recovered from the electrolyte rather than from an anode. See electrolysis and SX/EW.
A geological term referring to a deposit created by the action of water, but without movement from its original position (e.g. the bed of an ancient lake). See Alluvial deposit.
Acronym for Europe, Middle East and Africa.
Series of European standards.
End consumer or End user
A company in whose hands the identity of the fabricated metal is finally lost in a more complex product, e.g. a ship, refrigerator, motor car or transformer. Some of these companies also have fabricating subsidiaries. See also Fabricator.
Abbreviation for Electro Plated Nickel Silver. Nickel silver plated with silver. Used for cutlery and decorative items.
ERW tube
Steel tube formed from skelp and longitudinally electric resistance welded. See also welded tube.
See Basis. Sometimes a concentrates contract provides only for LME prices to rise above the basis price, in which case the scale is known as an escalator.
Short for electro slag refined. Refers to a process for making highly refined steel by using an ingot as a consumable electrode in an EAF where the arc is submerged in the slag and the pool of molten steel forms below its surface.
Short for exchange traded fund, i.e. a fund whose shares are traded on an exchange like ordinary shares. ETFs may invest in a wide variety of securities and derivatives, including those related to commodities.
Association of European ferro-alloy producers.
European Confederation of Iron and Steel Industries.
Organisation representing European steel, tube and metal distributors.
European Association of Metals. Umbrella organisation for non-ferrous metal industry in Europe.
European option
An option which in practice is only declared on the expiration date because the underlying metal can only be acquired at that time. The LME option contract, which in theory can be declared at any time prior to expiration, is effectively a European option because there is no economic benefit to early declaration.
An alloy of two (occasionally more) metals that melts at the lowest temperature of any combination of those metals.
Exchange contract
A contract registered and cleared on a futures exchange.
The implementation of an option following declaration.
Exotic metals
An imprecise term generally covering very small volume minor metals with very special characteristics, some degree of rarity and often a discontinuous market.
Expiration date
The date at which the buyer’s rights under an option contract expire unless declared. See Declaration Date.
Ex ship
Seller’s responsibility ends when the goods leave the slings alongside the vessel. Buyer must provide barge or vehicle in which to receive them.
Available from manufacturer’s or trader’s stock; immediately available.
Additional charges for specified sizes, gauges, tolerances.
A process of heating a billet of metal to a plastic state and forcing it through a die. This enables the quick and economical production of long lengths of complicated sections. Lead was the first metal to be extruded, but today aluminium, brass, magnesium and even stainless steel are extruded.
See ex-warehouse.
Goods sold ex-warehouse are usually placed on the truck, wagon or barge of the buyer. See also In-warehouse.
Electro zinc. Refers to galvanized sheet or coil where the zinc has been deposited electrolytically, not hot-dipped.


A company which transforms refined metal (and sometimes scrap as well) into semi-fabricated products (e.g. wire, cable, tubes, strip, rods) for sale to an end-consumer. More correctly referred to as a semi-fabricator.
Fair value
(i) A loose term referring to the level at which the commentator believes the market should be trading. (ii) In setting import duties, a comparison with the cost price of the goods in the country of origin or the level at which they are sold in other markets.
Stands for free alongside. Material is delivered to the quay or lighter alongside buyer’s vessel, but does not cover the cost of slinging it on board.
A form of failure of metals after being subject to vibration, repetitive strain or temperature cycles.
Futures Commission Merchant. US expression. Has same meaning as Commission House.
A class of stainless steels with no nickel content, so lower-cost. Good for high-temperature applications (e.g. motor car exhausts), but less good for aggressively corrosive conditions. See also austenitic and duplex.
An alloy with iron of a metal used to make steel alloys. The ferro-alloy is more easily produced from the ore than the pure metal and may also be easier to add to the melt. Most ferro-alloys are used to add alloying elements and to treat or modify iron or steel. See also Master alloy.
Materials mainly containing the element iron, i.e. iron and steel.
Futures Industry Association (USA).
Ore or ferro-alloy which is in too small a particle size to make a good charge to the furnace and is therefore pelletised or briquetted.
Fire refining
The refining of crude metal by pyrometallurgy, e.g. in a reverberatory furnace or converter.
A small flat particle of metal. Cobalt and electrolytic managanese cathode metal, after separation from the mother sheet, are in flake form. Also the raw material for aluminium paint, produced by ball-milling aluminium foil scrap.
In an I-beam the flanges are the horizontal lines at the top and bottom of the capital I cross-section. In an H-beam they are the verticals in the H. See also Web.
The metal which exudes at the joint line of a casting mould or die or closed die for forging. Usually removed at source and recycled.
A steel container to hold 34.5 kg of mercury, the standard unit. Colloquially called a bottle.
Flash furnace
A smelting furnace in which the concentrate and fuel are blown into a closed chamber in finely-divided form. A much faster reduction than in a reverberatory furnace.
Flat products
Expression mostly used in steel, covering plate, coil and sheet.
(i) That part of a futures exchange where open outcry trading takes place. See also Ring and Pit. (ii) A derivative position that protects the holder from any cost of a fall in price of the underlying below an agreed level. See also Cap.
The process used at a mine to separate fine particles of valuable metal from gangue. Finely-ground ore is slurried and passed through cells where agitators and chemicals cause the metal to rise to the surface, where it is recovered from the overflow, dried and sent to the smelter. Gangue in the underflow is sent to tailings ponds to settle out, sometimes for stowing back underground. See also concentration.
Flow moisture point
A measure of a danger point at which combined moisture in a cargo, typically concentrates, becomes free moisture under the effect of vibration or movement. See also thixotropic.
Flux skimmings
A type of zinc scrap arising from skimming oxidised metal from the surface of a hot dip galvanizing bath. With some 50% Zn content, it is recycled.
Flying shear
An oscillating cut-to-length shear that cuts sheet from coil while the band is moving.
Futures and Options Association (European association based in the UK).
Free on board. Seller bears all costs up to the material being placed on board buyer’s vessel.
The thinnest form of rolled metal, less than 0.15 mm thick, most commonly aluminium, but also other metals and steel. Thicker aluminium, e.g. for pie dishes, is also known as foil. See also shim.
Force majeure
The clause in an ore, metal, alloy or scrap supply contract which allows the seller not to deliver or the buyer not to take delivery of the contracted material because of events beyond his control. There is no force majeure clause in an LME contract. Customers affected by a declaration of force majeure on an LME-deliverable metal by a producer or refiner can always turn to the LME as a source of metal, and suppliers can deliver their metal to the LME if their customers declare force majeure.
Shaping steel and some non-ferrous metals while hot by repeated hammer blows. Forces of up to several tons may be used. Often results in the strongest form of the metal in the alloy used.
The purchase or sale of metal for delivery at a specified future date. Hence Forward Price, Forward Contract. As distinct from futures, a forward contract is not tradable.
Free on truck or train. Material at seller’s plant or in warehouse is placed on buyer’s truck or train wagon at seller’s expense.
(i) Place where castings are made. (ii) The last department in a smelter where the metal is cast into standard shapes (semis in steel). In copper (casting anodes) and aluminium (casting slab and billets) the department is usually known as the Casthouse
See shredder.
French for delivered.
Free machining
Metal such as steel or brass which has been alloyed with small amounts of lead, bismuth or other soft metal to optimise machinability. Free machining brass is a notably easy material to machine. See also leaded.
Financial Services Authority. UK regulatory body.
Physical production, consumption and macroeconomic data are studied to establish market fundamentals. Also see chartist.
Fusible alloy
Very low melting point alloy, e.g. for sprinkler systems.
Generic term for exchange-traded contracts creating an irrevocable obligation to buy or sell an underlying asset at a defined price and date in the future.
Futures exchange
A formal exchange on which certain futures are traded.


Lead ore.
A proprietary corrosion-resistant rolled steel coated with an alloy of 55% aluminium 45% zinc for advantages of both galvanizing and aluminising.
The process of protecting steel against corrosion by coating it with zinc. Sheet is usually continuously galvanized in coil, either by immersing in molten zinc (hot dipping) or electrodeposition. After galvanizing it may be corrugated and cut to length. Other products such as tube, angle and post-fabrication structures such as roof trusses and gates are hot-dipped. See also metal spraying.
A measure of the rate of change of an option’s delta in response to changes in the price of the underlying.
The worthless part of as-mined ore.
German silver
See nickel silver.
A give-up occurs when a client instructs an executing LME broker to give up an uncleared contract to another of his LME brokers for the purpose of being entered into the clearing and eventually settled. See also Transfer.
Good ordinary brand. A grade of zinc of 98% minimum purity.
Good Till Cancelled Order (GTC)
An order on the LME to buy or sell which is valid every market day during rings and kerbs (or during the entire day if specified), until cancelled by execution or client’s instructions.
Russian standard specifications.
Grade A
Designation of a good quality of tin in international commerce. The standard material in the New York OTC tin market. See also Straits tin.
Grain (of metal)
Metalworking, e.g. rolling, imparts a grain along the direction of rolling; forgings are stronger because the grain of the metal follows the shape of the forging.
Grain oriented
In steel, sheet for electrical laminations for transformers is sold as grain oriented. See Grain and electrical steel.
Grantor (of an option)
The person or firm that sells an option.
Good Till Cancelled.
A strong alloy of 85% copper, 5% tin, 5% lead and 5% zinc, or near variant of this mix.


A major type of iron ore. See also magnetite and limonite.
Expression covering the reduction in valuation of an asset (e.g. a warrant) offered in lieu of cash to cover a variation margin call.
Hammer mill
see Shredder.
Hazelett process
A method of continuously casting and rolling pure aluminium to produce sheet. See also Hunter Douglas and Direct chill rolling mill.
Hard zinc
A form of scrap zinc that accumulates at the bottom of a galvanizing bath.
A long product with a cross-section of the letter H.
Hot Briquetted Iron Association. Trade association covering direct-reduced iron.
High carbon ferro-chrome. See Charge chrome.
Hot Dip Galvanized. Refers to coil or sheet.
Heap leaching
A process for recovering metal, most commonly copper, from oxide or low grade ore or residues. Material is heaped up on an impermeable surface and sprayed with acid which picks up metal and is collected and sent for refining. The process may be bacterially assisted. See also Cement copper and SX/EW.
Heat treatment
Process for increasing the mechanical properties (strength, hardness) of steel and some non-ferrous metals. See also annealing.
Heavy media
A slurry in which some ores or scrap metal of differing densities can be sorted by flotation.
Hedge fund
An organisation trading in volatile markets which will go either long or short according to its view of the market. Does not necessarily engage in hedging.
The establishment of an opposite position on a futures market or by means of options from that held and priced in the physical commodity. Without hedging, the physical position would be at risk of price fluctuations.
A bottom-fired multiple-hearth reverberatory furnace used to convert molybdenum sulphide to oxide. Material is fed in at the top and moved by rabbles and gravity to successively hotter hearths.
High grade zinc. 99.5%. See also g.o.b. and shg.
High speed steel
High-alloy, high melting point, high hardness alloy steels for machine tools (drill bits, lathe tools, milling cutters etc.). Contain cobalt, molybdenum, tungsten etc.
High Tensile Brass
See Bronze.
Historic price carry
Heavy Melting Steel. Premium grade of steel scrap.
House account
A proprietary trade by a futures broker (i.e. on its own account)
Hot rolled. See also coil.
High strength low alloy. Refers to steels used in pipelines, engineering and construction of higher strength and corrosion resistance than carbon steel. Their properties are obtained by small additions of alloying elements such as manganese, molybdenum and vanadium.
Hunter Douglas process
A process comparable to Hazelett. It handles stronger aluminium alloy but is limited to narrow strip.


International Aluminium Association. Organisation representing primary aluminium producers globally which issues authoritative statistics on primary aluminium production.
See flange.
Inside diameter (of tube etc.).
Latin American steel industry association.
Inco terms
A suite of legally-precise terms covering the international shipment of material, e.g. fob, cif.
Old term for an order to a shipper or agent to buy and ship a material. A “specific” indent will call for particular brands, qualities or sizes. An “open” indent gives the shipper latitude on these aspects.
Form of cast refined metal used for convenience of shipment and handling. The form approved for delivery in LME aluminium, aluminium alloy, lead, tin and zinc contracts. Also see ingot maker.
Ingot maker
Firm producing specification alloy ingots, mainly aluminium or copper, from scrap for sale to foundries. See also Molten metal.
Initial margin
The initial outlay of money required to open a futures position. The size of this deposit varies from metal to metal, but is usually a fixed amount, set by the Clearing House, representing a small percentage (5% or 10%) of the value of the contract. See also Variation Margin.
Integrated producer
(i) In steel, a company which may or may not be an iron ore mine owner, but is a producer of both iron and steel, usually down to a finished product like rails or sheet. (ii) In non-ferrous, a producer of metal who owns mines, smelters and refineries, and sometimes also fabricating plants.
Dealings in a metal between LME brokers, over the telephone or on screen, which take place before the morning session, in the period between the close of the morning kerb and the first afternoon Ring, or after the afternoon kerb.
Deals concluded between LME members as official LME business at any time outside Ring trading hours.
An option whose strike price is above the current market price if a put or below it if a call.
A trade or pricing relating to a futures market price ruling during the day, i.e. without waiting for the close. See also local.
Intrinsic value
The value of an in-the-money option after taking account of the premium cost.
Introducing broker
Sometimes called a half-commission man; an individual who introduces a client to a clearing member of the LME and usually initiates his trades. See also Give-ups.
In warehouse
Buyer of metal in warehouse is responsible for all costs of removing the metal to his own transport. The basis of delivery under MMTA contracts. Title to metal sold under LME contracts passes with delivery of the warehouse warrant. LME prices therefore refer to metal lying in LME warehouse.
The product of the smelting of iron ore and the raw material for steel.
Plant smelting or direct-reducing iron ore to produce pig iron. If integrated forward to steelmaking, may deliver the iron as hot (liquid) metal.
International Swaps and Derivatives Association. Mainly concerned with OTC markets.
Institute of Scrap Recycling Industries. US-based trade association covering scrap recycling. Issues non-ferrous scrap specifications widely used in international trade.
International Tariff Commission US body which sets tariffs, including anti-dumping duties.
A test for the notch-sensitivity (effectively brittleness) of metals and alloys.


Japanese Engineering Specification. Japanese standards.
Just in time
A cost-conscious management approach to procurement which pares down to a minimum the delay between receipt of material and actual consumption of it.
Short for joint venture. Most obviously between two miners with contiguous deposits. May also be arranged between a smelter and miner to develop a deposit, or between parties elsewhere in the production chain. May even be arranged between two merchants for a specific transaction or series of transactions.


Kerb trading
This is a period at the end of each LME session (am and pm). In the morning all metals are rapidly traded around the ring from after the reading of Official Prices until 14.45. In the afternoon specific times are allocated to the different metals. Kerb trading is often expressed simply as ‘on the kerb’ or ‘kerb’. The facility is not common on other metal futures markets. The term comes from the early history of commodity futures markets when trading after hours was literally conducted on the kerb of the street.


A steel tube for introducing a gas , e.g. oxygen, into a bath of molten metal, mostly steel. See BOF.
Last trading day
On futures markets which trade in monthly positions, the last trading day before a particular month’s contract is delivered.
Letter of Credit. A bank instrument normally used to settle international trades.
Low carbon ferro-chrome, 0.3-0.6% C. See HCFeCr and charge chrome.
The organisation that clears LME trades. See also Clearing house.
Lead time
(i) The interval between placing an order and material being delivered. (ii) The interval between the decision to commission a new mine or plant and its coming on stream.
See free machining.
A precious metal trade term for scrap turnings and filings.
Derived from lending metal to the market. Selling metal on a nearby date and simultaneously buying it back on a forward date, thereby extending a long position. See also Borrowing.
In some futures markets (e.g Comex, SHFE) there is a limit to the rise or fall in the price of a commodity during a given period of time, usually a day. Once this limit is reached, trading is suspended until a prescribed period of time expires, when trading can resume. The suspension relates only to forward positions, the spot month continuing to trade.
Limit order
A futures order placed by a client to buy at up to, or sell at down to, his least acceptable price.
A major type of iron ore. See also haematite and magnetite.
Closing out of a long position. It is also sometimes used to denote closing out of a short position, but this is more correctly referred to as covering or covering in.
(i) The ability of a futures exchange to handle large volumes of business in a limited time. Influenced by the volume of stocks available for trading and the number of traders active. (ii) The availability of stocks for trading and active traders. See also squeeze.
London Metal Exchange. For fuller information on the exchange see Metal Bulletin’s Guide to the London Metal Exchange or the exchange’s own Rule Book.
Length overall – gives the length of a vessel and governs the quays at which it can berth.
See day trader.
German trade term equivalent to spot.
(i) An open purchased futures position. Thus ‘to go long’ means starting a transaction by the purchase of a futures contract. (ii) Equally a producer or a processor may be long of physical metal if his supply of metal exceeds his sales orders.
Long products
Self-explanatory term mostly used in steel to refer to products such as rod, rebars, rails and structurals.
Long ton
The old avoirdupois ton of 2240 lb. Still used in some iron ore trade. See also metric ton and short ton.
Look back
A fairly rare facility in a period pricing contract, allowing the buyer to refer to a price of a day or week earlier than that when the next delivery is to be made. Valuable in a rising market.
Lost wax
A method of casting very accurate shapes. A wax model is coated in a refractory (i), the wax melted out and metal poured into the cavity. Traditionally used for sculptures, it is also used to make parts in refractory (ii) metals such as turbine blades.
The minimum amount of a commodity in which one may deal on a futures market. On the LME a lot is often called a warrant or contract.
Low alloy steel
Lumpy ore
Iron ore that is lumpy as-mined and ready to charge to the blast furnace (unless the iron content needs upgrading). See also Fines.


Most non-ferrous metals are non-magnetic, except nickel and cobalt, which are strongly magnetic. Most ferrous metals are magnetic except some grades of stainless steel.
Magnetic separation
(i) Where ores contain magnetically attractive metals, concentration may be effected dry with magnets and conveyor belts. (ii) Also used to recover ferrous materials from streams of mixed domestic waste.
A major form of iron ore. See also Haematite and Limonite.
Malleable iron
Iron castings which have been made less brittle by heat treatment. There are two types, known as blackheart and whiteheart. See also SG iron.
Ship’s document listing the packages in the vessel’s cargo. It must be lodged with local Customs before unloading can begin.
Maraging steels
Nickel-containing steels which attain their highest strength by heat treatment followed by ageing for several hours at lower temperature. See also Age hardening.
See Initial Margin and Variation Margin.
Marine store dealer
The first operator on the scrap collection chain who has premises.
Mark to market
Revaluing an open position on the basis of current market price, usually to assess the need for a variation margin.
(i) The location of trading. (ii) The current price of a commodity. (iii) The community of companies and individuals concerned with producing, trading and consuming a metal.
Market order
An order to buy or sell a futures contract at the first obtainable price or prices on the market for the tonnage involved. If the order is given “with discretion” the broker may execute it over time as he
sees fit; if “without discretion” he must hit every bid or offer as it appears until the order is filled.
Market maker
On some futures or terminal markets, but not the LME, one firm or a few may be
designated market makers and are obliged to be buyers and sellers at all times, sometimes in exchange for certain market benefits.
A heat treatable type of stainless steel with some of the characteristics of austenitic.
Monthly Average Settlement Price. The value for settling Tapo exercise on the LME.
Master alloy
An alloy, usually non-ferrous, with a high content of an alloying metal. The master alloy is
more easily added to a specification alloy mix than the metal itself. See also ferro-alloy.
Matching system
The system operated by the Clearing House for the matching and confirmation of
futures exchange contracts between clearing members.
A first fusion product suitable only for further refining.
A forward or futures contract reaches maturity when its delivery date arrives.
Mean of four
An expression in base metal period pricing contracts where the reference price is the average of LME buyer’s and seller’s prices in both the cash and three months positions.
A metal merchant, as distinct from a producer’s agent or broker, often acts as a principal, buying steel, metal, concentrate or scrap from producers and others and selling it on to others. He will often hold metal on his own account while waiting for a buyer or go short.
Merchant (adjective)
“Merchant” means the normal commercial quality. Mostly used in steel, e.g. merchant bar, merchant pig iron.
The sizing of a powder metal is determined by the size of mesh in a screen or sieve that it will pass through.
Metal Service Center
Institute North American association of steel and metal stockists. Issues statistics and reports.
Metal spraying
Applying one metal in powder form to the surface of another, e.g. zinc or aluminium to steel for corrosion resistance, or tungsten carbide to a knife edge. A process sometimes suitable for use in situ, on bridges for example.
Metric ton
Also called tonne. 1,000 kg or 2204.6 lb. See also long ton and short ton.
Micro alloys
A generic name for the alloying elements used in HSLA steels.
Markets in Financial Instruments Directive. An EU directive covering the conduct of business on financial markets and by brokers, banks and others in those markets.
Mild steel
Unalloyed ductile steel.
(i) The complex of crushers, ball mills and flotation cells that comprise a concentrator. (ii) A rolling mill. (iii) A metal-cutting machine that complements a lathe by producing flat surfaces, keyways etc.
Heavy oxidation on the surface of e.g. hot rolled steel coil. Can be recycled for the metal content after removal by abrading or pickling.
Mineral sands
Coastal alluvial deposits of heavy minerals containing titanium, zirconium, rare earths etc.
A steel production plant using ferrous scrap as its primary raw material. Usually this type of plant produces crude steel from an electric arc furnace (EAF) which is normally used to roll long products, although some EAF-based flat products mills also exist. Mini-mills can also use pig iron and DRI for their raw material feed.
Minimum fluctuation
See Tick.
Contracts on the LME and other futures markets with a smaller than standard lot size. May also be only cash-settled.
(i) An option strategy involving selling an option (e.g. a put option) to fund the purchase of an opposite option (i.e. a call option). (ii) The expression may also be used in physical period pricing contracts, where limits are laid down to movement in the reference price. Beyond the limits, renegotiation is usually called for.
Minor metals
Non-ferrous metals of smaller volume of international trade and frequently higher value than base metals. Often by-products. See also exotic metals and MMTA.
see Rare Earths.
Market if touched. A term commonly used by chartists. It is an instruction to buy or sell at market if a certain level above or below the current price is reached.
Minor Metals Trade Association. UK-based international association for producers, traders and consumers of minor metals.
Molten aluminium
Some aluminium secondary ingot makers supply metal to nearby foundries in the molten state in insulated ladles on special trucks.
A proprietary alloy of 70% nickel 30% copper with exceptional resistance to seawater.
Short for metric ton unit. See Unit.
Multiple lengths
Where long products such as rod, tube or angle are ordered at exact lengths, the mill may have the option to supply longer lengths that are exact multiples of the specified length.


North American Free Trade Area. Customs union of USA, Canada and Mexico.
Naked option
A speculative option which the buyer or grantor does not have the resource in metal to cover.
Notional Average Price on the LME. A daily average figure which rolls forward through the month to end up as the MASP.
National Association of Purchasing Managers Index. Important US measure of economic health.
Native metal
Actual nuggets of metal occurring rarely in rich ores.
A date/contract that is relatively close to the cash/spot/expiry date.
Net position
(i) An operator’s position after offsetting all his long positions in a metal against all his short ones. (ii) May also be calculated on all his open positions in futures regardless of commodity.
Nickel silver
A copper-based alloy with zinc and nickel, used for example in cutlery.
A group of nickel-based alloys used in jet engines.
A process of case-hardening steels of appropriate composition with nitrogen to give superior results to case hardening with heat alone.
Non Market Price Transaction. A deal at a price agreed between broker and client that is not the current LME price for the relevant position, usually a historic price. Special rules apply to managing and clearing such a transaction.
Noble metals
Old-fashioned designation of precious metals. Opposite of Base metals. German – Edelmetall/Unedelmetall.
Nominal price
(i) On the LME, an estimate of the price for a future month date which is used to designate a closing price when no trading has taken place in that date. (ii) Also used for current price indications in a source like Metal Bulletin in similar circumstances in physical trading.
Non-ferrous metals
All metals except ferrous metals.
Most non-ferrous metals are non-magnetic, except nickel and cobalt, which are strongly magnetic. Most ferrous metals are magnetic except some grades of stainless steel.
Notched bar
An ingot which has several deep notches along its length to enable it to be broken and allow precise amounts of metal or alloy to be added to the melt.
The technical term for the process whereby trades on a futures exchange between clearing members are taken over by the clearing house.
New York Mercantile Exchange. (See also Comex).


Ore/bulk/oil – the largest type of cargo vessel. See also Capesize.
Oil Country Tubular Goods. Refers to a category of larger diameter steel pipe.
Outside diameter (of tube etc.).
The price the seller asks for the commodity on offer. See also Bid.
A contract or trading activity which takes place outside any exchange, so is, by definition, OTC.
Official prices
Prices established by the LME as the closing prices at the end of the morning session.
One Cancels Other (OCO)
On futures markets, a trading instruction incorporating two orders with a built-in further instruction to cancel one if the other is executed. The order can indicate two different price levels or a combination of price and time limits.
Open hearth
An obsolescent steelmaking technique, at one time the mainstay of world production. Mainly superseded by the BOF.
Open interest
Futures positions on an exchange that have not yet been closed out, i.e remain to be fulfilled. Published by some futures exchanges as an important statistic for relevant contracts.
Open outcry
The method of face-to-face dealing employed on the LME Ring and on some other futures markets in the pit. A broker announces to the other brokers present his interest to buy or sell the commodity, and the required delivery date and price. When another broker responds to accept the bid or offer and proposes a quantity, a deal is struck and that price becomes the latest traded price for that delivery date.
Open pit
Mining technique for large disseminated deposits near the surface.
Open position
A forward market position which has not been closed out. See also Open interest.
An option is a contract which gives the buyer the right but not the obligation for a specified period of time to buy from (call) or sell to (put) the grantor or seller a specified quantity of metal at a specified strike price on a specified delivery date in return for payment of a negotiated premium. The option must be declared by the buyer on or before its expiration date, otherwise it is abandoned. If it is an Asian option or LME Tapo, declaration is automatic if the option is in the money. See Assignment.
Option spread
The simultaneous purchase and sale of a pair of calls (or puts) in the same metal but at different strike prices or different expiration dates, or both. The option equivalent of a carry.
Organic coating
Application of a polymer coating (paint) on a continuous processing line or through a batch process.
Strictly speaking, metalliferous material in the ground, or at minehead. Regularly used also to refer to concentrates.
Over The Counter. Signifies a bilateral deal, usually between a broker or bank and his client, which does not take place on an exchange. It may have some of the characteristics of a futures contract, but if so is usually called a forward contract because it is not exchange-traded. Increasingly exchanges and clearing houses offer to clear OTC contracts, affording users protection from counterparty risk, while allowing them to keep the flexibility of OTC trading. Such trades may be subject to financial regulation in the country of the seller and/or buyer.
An option whose strike price is above the current market price if a call and below it if a put.
A market analyst’s opinion that the market has moved further or faster than justified by all the known factors.
An oxidising atmosphere in a furnace drives out carbon. See also Reducing.


Pack rolling
A technique of rolling two thicknesses of thin sheet or foil together and then separating them.
The largest size of vessel that can pass through the Panama Canal. See also Capesize.
Participating call
A strategy for using futures and options with many of the characteristics of a synthetic call.
A cutting process to produce a bright surface on, and remove surface defects from, round steel bar.
A technique of blasting the surface of metal with shot. Improves appearance and hardens the surface.
(i) In iron ore, fines are blended with clay and rolled into pellets of 6 – 10mm diameter and sintered to make a suitable charge to the blast furnace or for direct reduction. (ii) In some metals, notably nickel, the metal in powder form is compacted into pillow-shaped pieces about 3cm square also known as pellets. Nickel produced by the Inco process from nickel carbonyl is also in spherical pellet form. See also briquettes.
Period pricing
A contract for physical metal supply over a period (usually a year or a quarter) in which all elements except price are settled in advance. Invoices are then structured on, for example the average of the LME price or Metal Bulletin quotation for that metal for the month of delivery. See also Reference price and Benchmark.
Petroleum coke Or Pet Coke for short.
The raw material for making anodes for aluminium smelting. See also potline.
Platinum group metals – platinum, palladium, rhodium, iridium and osmium.
Trade in the commodity itself, as distinct from trading it on a futures market.
Immersing hot rolled steel, for example, in acid to remove millscale.
(i) A rough cast shape from the blast furnace, e.g. pig iron. (ii) Also the standard form in which lead is traded internationally and delivered on the LME. See also sow.
The trading floor on some futures markets. Unlike the LME Ring, dealers are not organised, but jostle. Several markets have abandoned pit trading in favour of electronic trading.
Plasma ironmaking
A high speed, low-energy ironmaking process.
Thick rolled metal. May be sold as such, especially in steel and aluminium, or rolled further to sheet.
Jargon word for the type of futures trading in question – open outcry, electronic or telephone, but mostly refers to the particular system used for electronic trading, including proprietary systems.
A reducing operation in refining, especially of copper. Originally performed by introducing greenwood poles into the melt, it may now be done by bubbling gas.
Position limit
A value limit on the futures trades a broker will perform for a client. On the LME this is often with particular reference to the credit extended by the broker to the client. Control on an individual broker’s or client’s positions is one of the instruments the LME uses to prevent abnormal trading developing, such as a squeeze.
A row of large cells for the electrolytic reduction of aluminium from alumina. A potline may have an annual capacity of 100,000 tons or more and a smelter may have up to ten lines.
Powder metals
A distinct branch of metallurgy. Powder metals may be compacted and sintered to form finished components with particular characteristics, used in surface coating techniques or even burned in pyrotechnics.
Precious metals
Gold, silver and PGMs. See also Noble metals.
At the LME, trading electronically or over the telephone among brokers before the market opens for ring-dealing. Premarket trading can be very active, influenced by the hedging operations of producers and consumers.
(i) The cost of buying an option. (ii) The amount by which the price for one delivery date is greater than that for another date. (iii) The difference in price between different refined products, e.g. between non-ferrous ingot and billet. (iv) The addition in price over a reference price negotiated between physical trading partners for a specific product, delivery location or date.
Price (used as a transitive verb)
To fix the price of a purchase or sale on one or more LME quotations, usually the official settlement price for the metal concerned. Alternatively on a Metal Bulletin quotation.
Price-fix hedge
A hedge designed to lock in for a future date, up to several years ahead, a price that the hedger (typically a miner or end-user) will find acceptable.
As a result of the price discovery that results from its trading, a futures market is price-making. So also is a trade newspaper like Metal Bulletin when it evaluates quotations. See also Reference price, period pricing, price-taking.
Parties to a period pricing contract are price-taking when they import a reference price into the operation of their contract. See also price-making.
Pricing-in (out)
When a merchant agrees to buy a quantity of metal from, for example, an overbought consumer, both parties will agree in advance that the price basis will be the closing price of a specific ring or rings on the LME. The buyer will therefore be pricing-in on the close of that ring, and will probably hedge his purchase by selling during the closing stages of that ring. The consumer will be pricing-out and may hedge by buying at the close. Pricing on the basis of non-futures market reference prices cannot normally be hedged.
Primary metals
Metal which has been produced from ore as distinct from that produced from scrap.
Prime Western
US zinc grade min. 98%.
A person or organisation able to make, and obliged to fulfil, all the conditions of a contract.
For immediate delivery. On the LME this is in two days’ time (but see Tom-Next)
Prompt date
See delivery date.
Proprietary process. A Properzi continuous casting and rolling plant produces long lengths of aluminium wire rod direct from molten metal.
Pro rata
In direct proportion. (i) Term used in Customs tariffs. (ii) In basis and scale pricing, when the unit value of the scale is the same as in the basis, it is said to be pro rata.
See Option.
A copper-iron sulphide mineral.


Quick Basic Oxygen Process. A bottom-blown type of BOF.
Quaternary alloy
An alloy of four metals.
Immersing steel in oil or water after heat treatment to control the rate of cooling and degree of hardening.
100 kg. Quantity sometimes quoted in Customs tariffs.
(i) Tonnage limits on the amount of a particular ore, metal or alloy that can be imported into
a country in a month, quarter or year either absolutely or at a more favourable rate of import duty.
(ii) Limitation of the tonnage of a particular material that can be exported from a particular country in a given period. (iii) A rationing limit per customer applied by a seller of a material in short supply.
(i) The price at which the seller or buyer is willing to trade. (ii) An independent evaluation, for example by Metal Bulletin, of the going market price of a metal, ore, alloy or scrap in which there is no formal market.


A kind of rake for stirring solid material in a furnace. See, for example, Herreshoff.
A shaft between two levels in a mine which has been dug from the bottom up.
Ramp up
In commissioning a new mine or plant, operations begin slowly and cautiously and are then ramped up to, or above, design capacity.
Random lengths
Long products (bar, tube) supplied in lengths as they come off the mill. See also Exact Lengths.
Rare earths
A group of metallic elements lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, yttrium, erbium, thulium, ytterbium, lutetium. Clustering together in the periodic table, they are often extracted from cerium mischmetal (German for mixed metals). Their unique characteristics mean a new application can propel one or other of them from laboratory curiosity to exotic metal very quickly. Many notable for their uses in electromagnetic devices.
Raw metal
Unwrought primary metal.
Refining charge made by a copper refiner for refining anode copper. Usually expressed in cents per lb.
See also T/C.
Acronym for Registration, Evaluation and Authorisation of Chemicals. EU legislation designed to protect the environment and human health by imposing stringent bureaucratic controls on all parties in the EU producing, trading or processing industrial raw materials. Registration is in process and Authorisation begins rolling during 2011.
Short for reinforcing bar. Steel rod intended for incorporation in concrete to reinforce it. See also Debar.
A reducing atmosphere in a furnace drives out oxygen. See also Oxidising. In aluminium production alumina is reduced to the metal in the electrolytic cell.
Reference price
The price written into a period pricing or benchmark contract.
A processing plant which produces high purity metal either by electrolysis, electrowinning or fire-refining. In copper and lead production, refining is preceded by smelting, but for tin, zinc and nickel, smelting and refining blend into one process of recovering marketable quality metal from concentrates. Refiners (and smelters) may also treat scrap materials. For aluminium, a refinery produces alumina, which is then fed into a smelter to produce the metal.
(i) Heat-resisting material used, for example, to line blast and other furnaces and make crucibles. (ii) Describes metals that are extremely difficult to recover from their ores.
Old-fashioned word for a primary refined metal, now only used with antimony.
Arbitrarily failing to perform a contract requirement such as delivery or payment.
Secondary metal-containing materials that require smelting to recover the metal, as distinct from scrap which may only require melting and blending.
(i) Chartist’s term for when prices appear reluctant to move beyond a certain level. (ii) A type of wire used in electrical heating.
Reverberatory furnace
The simplest kind of smelting furnace in the form of a refractory-lined box up to about 40 ft (12.5 metres) long in which metal is kept molten in the bottom of the furnace by flame (oil, gas or coal-fired) reverberating around the upper part of the furnace.
Stands for Recognised Investment Exchange within the UK’s Financial Services Act. The LME is such an exchange.
(i) A five-minute open outcry trading period in a single metal on the LME. (ii) The circle of seats where such trading takes place. See also Pit.
Ring dealing broker
An organisation which is a Category 1 full clearing member of the LME and entitled to deal in the Ring.
Risk management
The management of metal price risk on an ongoing basis by the use of futures and options with a view to containing the impact of adverse price movements and enhancing profitability. The concept is an extension of the more simple type of hedging whereby the pricing of specific transactions or production streams is offset or fixed. More broadly, the management of price risk in any active portfolio of trading positions.
Controlled heating of sulphide concentrates to convert them to the oxide by driving off and capturing the sulphur.
(i) Non-ferrous; a round, square or polygonal solid section supplied in straight lengths. Usually produced by extrusion. See also Wire rod. (ii) Ferrous. As for non-ferrous, except usually produced by rolling. Used to make mesh for concrete reinforcement or as a semi-finished product for wire drawing.
Rod mill
(i) A rotating cylinder like a ball mill, but loaded with steel rods. (ii) A mill for producing steel or non-ferrous rod.
A cylindrical shaped pellet. A standard form of nickel.
(i) To transfer a market position in futures or options from one date (forward or backward) or one strike price (up or down) to another by a simultaneous purchase and sale. (ii) The heart of a sheet or coil rolling mill, which may have from two up to ten or more rolls in one or a series of rolling stands. Also see CR and HR.
Extending a futures position at maturity by re-opening the same position for a later date. See also Carrying.
Room and pillar
Mine development technique employed in good bearing ground.
Roughing stand
The first millstand in a hot rolling mill train (a series of stands).
Round turn
Expression covering the purchase and sale of a warrant by a broker for a client; the basis for charging commission.
Rolled steel joist. A common structural steel component, usually an I-beam.
Run of mine
Ore (e.g. iron ore) which does not require concentration and can be used as-mined.


Society of Automotive Engineers (USA). Issues specifications for metals used in car manufacture.
Where a large tonnage of ore, metal or scrap requires assaying, perhaps at the port, representative samples must first be taken from the bulk. This is a skilled operation for which standard procedures are laid down. An assay of this type of material is only as good as the sample that has been taken.
Special Bar Quality. Steel bar products beyond the commodity grades of merchant bar (such as rebar or construction bar), but below the specialist products such as stainless steels and nickel alloys. SBQ is generally used in the USA, while in Europe the term ‘engineering steels’ is more common. Both terms refer to steel types as well as to bar products, so also refer to qualities of billet and slab as well as bar.
(i) See basis (ii) Heavy oxidation on the surface of, for example, hot rolled steel coil. Can be recycled for the metal content after removal by abrading or pickling. Scrap (i) Production (or ‘prompt’) scrap; metal arising from fabricating processes such as edge trimmings from rolling, billet discards from extrusion or flash from castings. This is often recycled in-house. (ii) Process scrap; material such as steel turnings or brass swarf arising from manufacturing processes. (iii) Old scrap; material arising from artefacts at the end of their useful lives such as buildings, motor cars, domestic equipment, ships, cables and machinery. Metal scrap always has value unless it is in tiny amounts and difficult to collect.
Solid drawn. Refers to tube that is not welded.
Secondary metal dealer
A firm which specialises in buying and selling scrap metal in bulk. They then sort it and sell parcels of specification scrap to iron and steelworks, refiners, ingot makers and foundries. The largest firms operate internationally. Nowadays often called recyclers.
Extruded or rolled long products of relatively complex cross-section. Sometimes also drawn.
The LME’s electronic trading system.
Sellers over
The opposite of buyers over.
Seller’s price
The higher price in the ranges of cash and three months prices announced at the end of each LME session. See also settlement price. Other futures markets may quote a single closing price, so do not have a seller’s price.
Semi-continuous casting
See Continuous casting.
See Fabricator.
(i) Non-ferrous; usual trade term for semi-fabricated products (sheet, wire, tube etc.).
(ii) Ferrous; refers to shapes from which sheet, tube etc. are produced – billet, slab etc.
A special type of rolling mill with multiple rolls in a cluster formation to apply very high pressure to the work rolls in contact with the coil passing through the mill. Cold rolls faster and more accurately than conventional types of mill. Often used for stainless steel production. (Also see AGC).
The collective mood of a market. Sometimes influenced by fundamental factors and news, sometimes technical factors, and sometimes neither.
centre A stockist who adds value to some, or all, of his stock by processing it in some way (e.g. cutting, bending, drilling) before onward sale.
The period each day during which an exchange permits trading. There are two sessions on the LME each day, one in the morning and one in the afternoon. Each session comprises essentially two five-minute ‘rings’ for each commodity, followed by a ‘kerb’ period. On other futures markets a session usually equals the working day.
Settlement price
On the LME, the last unfulfilled offer to sell cash at the close of the second morning ring in each metal – i.e. the cash seller’s price at that close. This price, which is officially announced on the LME floor, prevails as the accepted cash reference price for the metal for the succeeding twenty four hours. On other exchanges, it is more usual to take the closing price at the end of the day as the settlement price.
SG iron
Spheroidal Graphite cast iron. Cast iron which has been made malleable by the addition of ferro-silicon to change the form of the graphite to spheroidal. Also called ductile iron.
Vertical or inclined passage in mining for access and ventilation.
Shaft furnace
A melting furnace classically used (i) for continuous melting of copper cathode as
the first stage in the continuous casting and rolling of wire rod; (ii) for direct reduction of iron;
(iii) sometimes used for other metals.
Shaking table
A simple method of concentrating some ores. The heavy mineral gravitates to one end of the table, the lighter gangue to the other.
Non-ferrous; a loose term for unwrought metal forms designed for semi-fabrication such as billet and rolling slab. Comparable to steel semis.
A thin flat rectangular piece of rolled metal. May be hot rolled or cold rolled. Nowadays almost always cut from coil.
Sheet piling
Long narrow steel plates, profiled to interlock and provide a barrier to support excavations etc.
Sheffield plate
An old method of cladding copper artefacts with a thin sheet of silver. Superseded by electroplating.
Shipping term relating to loading – Sundays and holidays excepted.
Shanghai Futures Exchange. Biggest metal futures exchange in China.
Special High Grade. The highest commercial grade of zinc produced electrolytically and sold as slab. 99.99%, but LME-deliverable brands must assay 99.995%.
Steel or brass strip rolled to a precise thickness, usually below 0.5 mm.
The opposite of shex.
(i) A futures market commitment to sell material at a future date for which the holder does not have the underlying metal. To go short is to sell forward with the expectation of buying back at maturity at a lower price. See also Bear. (ii) A short physical position is where the producer or fabricator has a forward delivery commitment for which he does not have the metal in hand. See also long.
Short ton
A ton of 2,000 lb, mostly used in the USA . See also long ton and metric ton.
A powerful machine used in the scrap industry to batter large items of scrap such as cars and domestic equipment into fragments which are then sorted as between steel, non-ferrous and waste (also called fluff). See also chopping.
Silver solder
A silver-based alloy for joining copper and its alloys more strongly than with soft (lead-tin) solder.
(i) Converting soft, loose ores or concentrates to a clinker-like consistency by roasting. (ii) Compacting particulate powder metals etc. by pressure and heat.
Heavy-gauge steel strip for forming into tube for longitudinal welding. See ERW tube.
The oxidised surface of molten metal which is removed from the furnace or crucible. Subsequently recycled to recover the metal value.
The semi (in steel) or non-ferrous equivalent intended for rolling into coil or sheet.
Metal smelting waste. Has non-metallic uses such as road fill, abrasive and building blocks.
A process of converting sheet in coils into strip by passing the metal through a machine with multiple rotary knives.
See calot
A processing plant which produces crude non-ferrous metal by treating mine feed (concentrate) or residues. In the case of aluminium a smelter produces refined metal from alumina.
A low melting point alloy for joining copper and its alloys (e.g. plumbing fittings, wiring). Traditionally eutectic lead-tin, the lead is now being legislated out of the alloy.
Solid drawn
Tube drawn down from a tube shell into straight lengths or in coils without a welded joint.
Trade term for a large lump of unwrought primary aluminium, usually about 750 kg. Derived from early iron technology, when metal was cast into a large puddle from which smaller puddles flowed, thought to resemble a sow and her piglets. See also pig.
Spark testing
A process for sorting scrap metal, especially high speed steel. The metal is held against a grinding wheel and the colour and length of the spark assessed
Specialty steel
Expression mainly used in USA to refer to higher-specification alloy steels.
An instrument used to analyse the content of metals by vaporising a small part of a metal sample with an electric arc and checking the pattern of a spectrum of light passing through the gas against standards. The most common method of production analysis.
Obsolete trade name for zinc. Antique trade name for a zinc-lead alloy used for small statues etc.
An obsolescent low-manganese form of ferro-manganese.
Sandy minerals such as mineral sands can be concentrated by slurrying and passing down a spiral channel to separate the heavy component.
Spiral welded tube
Large-diameter steel tube produced by winding coil on a mandrel at 45 degrees and welding the resulting seam.
Splitting limits
Where a contract specifies content of metal or impurities, ore or scrap is likely to be assayed both before shipment and on arrival. If the results do not differ by too much, a figure which is the mean of the two figures will be accepted. Splitting limits define what is considered not too much. Where the difference is outside these limits, an umpire analysis will be called and discounts or premia applied, or the parcel may be rejected.
The form in which certain primary metals are recovered, namely platinum, palladium and titanium. Also iron obtained by direct reduction from ore.
(i) Physical; immediately available at a named location. (ii) Futures; see spot month.
Spot month
The first deliverable month for which a quotation is available on a futures market. For example, ‘March is now the spot month on Comex’. As the LME trades in daily dates, it does not have a spot month. See Cash.
Spot testing
A method of identifying scrap metal by adding drops of one or more acids to the sample and studying the colour change, reaction etc.
The distance between two prices – e.g. buyer and seller or spot and forward. Also a trade in which two or more instruments such as derivative contracts are engaged in simultaneously with the aim of profiting from a favourable change in the relative value of the two instruments, while being protected against overall market movements. See also Arbitrage.
Pressure on a particular delivery date which makes the price of that date higher in relation to other dates. See Corner.
Stainless steel
Rust-resistant steels containing chromium; also, according to alloy, nickel, molybdenum and other metals. A fast-growing segment of the steel market. See also Austenitic, Ferritic and Duplex.
Standard deviation
A statistical measure of the recent range of prices of a metal which serves as a basis for assessing its current level of volatility.
The principal structural metal, made from iron. Less expensive than other metals and stronger than most, but heavy and prone to corrode unless protected.
A plant melting iron and/or scrap to make steel. May be integrated backwards to iron smelting, and/or forward to making semis and finished product.
A stockist holds supplies of non-ferrous semis and steel products ready for sale to users. Stockists usually specialise either in steel/stainless steel/aluminium or in copper/brass/high-value metals. Known in the USA as Service Centers. See also Metal Service Center Institute A stockist function is also fulfilled by, for example, a builders’ merchant holding large stocks of copper tubing or plumbing fitments. See Fabricator.
Stop-loss order
A futures market order which becomes a market order to buy only if the market advances to a specified level or to sell only if the market declines to a specified level. As soon as this specified level is touched or breached the order is executed for the client at the next obtainable price or prices. There is no guarantee the order will be executed at the price specified. A stop-loss order is, as its name implies, instituted to prevent or minimise losses from either a short or long position. See also MIT.
The simultaneous purchase (or sometimes sale) of put and call options at the same strike price. Normally used when an increase in volatility is expected.
Straits tin
Tin from Malaysia. The classic Grade A tin.
The simultaneous sale (or purchase) of out of the money calls and out of the money puts for the same date.
Strike price
See Basis price.
Long lengths of narrow rolled material, usually sold coiled. Often produced by slitting coil. See also Hunter Douglas.
Steel girders and heavy angles used in construction. See I-beam, H-beam and RSJ.
A material which readily passes from the solid to the gaseous state without going through the liquid phase is said to sublime.
(i) General term for independent services such as sampling and assay. (ii) Also relates to a futures market’s supervision of its trading.
Sur Wagon depart
French for fot.
(i) A very broad category of derivative contract in which two counterparties exchange one
cash flow or exposure for another. Swaps are OTC, though increasingly some are also cleared.
(ii) Specifically, an agreement between a metal hedger and a broker or bank to swap a series of forward cash flows based on selling and buying at an agreed pair of prices. These may be fixed
(a known LME price) or floating (a yet-to-be-determined LME average price). The instrument originated in the banking business, but is similar to an LME averaging agreement whereby a broker agrees to guarantee a hedger an average price for opening or liquidating a hedge.
Small particles of production scrap arising from turning, milling and boring. Often contaminated with cutting oil. May be baled or briquetted for transport and melting. See also turnings.
The name of the LME’s system for electronic storage and management of warrants.
(i) On the LME, the exchange of metal in one warehouse for that in another, e.g. Rotterdam for London. (ii) The movement out of one futures contract into another, usually further forward. (iii) In physical trade the exchange between producers or traders of two identical delivery commitments to different destinations which can thus be implemented with more cost-effective freight.
Stands for solvent extraction/electrowinning. For solvent extraction see Heap leaching.
A new system for managing settlement being introduced on the LME.
Synthetic put (or call)
A combination of a short (or long) futures position and a long out of the money call (or put) option. This protects the hedger against prices moving in the direction he fears, but also allows him to participate in part of a favourable move.


A form of unwrought aluminium with a T-shaped cross section to facilitate handling by fork lift truck. Normally of 675 kg pieceweight.
Type of iron ore principally from the US Midwest.
The slurried waste from a concentrator. See also flotation.
The place where electrolytic refining or electrowinning takes place. Comprises a series of electrolytic cells with DC power, cranage, electrolyte circulation etc.
Short for Traded Average Price Options. An LME instrument basically structured like an Asian option where the strike price is an LME monthly average. This matches period pricing contracts where the reference price is the monthly average. Tapos are automatically exercised if in the money by the issue of a corresponding LME futures contract. See also MASP, NAP and Cross.
Treatment Charge. The charge made by a smelter for smelting concentrates or residues. When the smelter is vertically integrated with refining, the R/C is also included in the terms. Note that the T/C is charged, usually in dollars, per ton of material treated, not per ton of metal recovered. See also deduction.
Technical analysis
See chartist.
Steel trade term for pouring molten metal, usually into ingot moulds.
When steel, especially high speed steel, has been heat-treated it is then normally tempered at lower temperature to optimise hardness without excessive brittleness.
(i) Delivery of the physical commodity against a futures contract. (ii) Competitive process whereby producers and physical traders are invited to offer for a defined supply contract, or bid for a mining concession, regular production, or parcel of metal or scrap.
Tenor limit
Part of a broker’s control of his exposure to a client by specifying the length of forward position for which he will allow the client to open a transaction. See also Credit limit.
Terminal market
A formal market for trading commodities for forward delivery. Lacks several features that distinguish a futures market.
Steel sheet coated with a lead-tin alloy. Traditional roofing material.
Ternary alloy
An alloy of three metals.
Thermit process
Proprietary process using aluminothermy.
Denotes changes in the value of an option with the passage of time.
Liable to become liquid when agitated. Some concentrates exhibit this undesirable characteristic. See also Flow Moisture Point.
The minimum permitted price fluctuation between one trade and the next on a futures market.
Time decay
Expression covering the passage of time while a position or option is open.
Thin steel sheet coated with a minute amount of tin. Used to make tin cans.
Smelters or refiners treat material on toll when they do not take ownership of the concentrates or scrap, but only make the owner a charge for processing it.
Within the LME’s normal two day settlement, a position may nevertheless have a prompt date one day forward. It can still be officially traded up to the first ring of that day under a facility known as Tom(orrow)-Next(day). This permits such positions to be rolled forward to the official cash date on payment of a negotiated premium.
Standardised unit of transport cost.
Tool steel
see high speed steel.
English word for an itinerant scrap buyer, a first point on the collection chain.
The property of a metal, mostly steel, to have high strength without associated brittleness.
Tough pitch
Copper which has its oxygen content controlled to give it the best electrical characteristics is said to be tough pitch.
Traded Option
An option contract based on standardised terms which can be traded to third parties or on an Exchange. The standard LME options contracts, structured on a strike price on a particular day, are traded option contracts. See also Tapo.
Transaction price hedge
A hedge designed to protect an open physical position against an adverse price movement while the postion is open. See also Price-fix hedge.
Sometimes erroneously called give-ups, transfers are a process whereby a client instructs one of his LME brokers to transfer responsibility for an open cleared position to another of his brokers for the sake of strengthening his open position with the latter broker.
Treatment charge
See T/C.
Tube shell
A short, thick-walled tube for subsequent drawing down to finished size. See also billet.
Tungsten carbide
Chemical symbol WC. The hardest known material after diamond.
Scrap from machining in a lathe. Turnings, especially of steel, are longer than swarf and often harder to handle.
See Volume.


Umpire assay
See splitting limits.
Underlying asset
The physical metal whose deliverability underpins an open futures position or option.
Many ores are priced per unit of the valuable metal contained. A unit is 1% of a ton, so a 65% ore would contain 65 units.
See wrought metal.
U.S. Geological Survey. Issues reports on metal markets and statistics.
Ultimate Tensile Strength. The principal measure of the strength of a metal.


An LME term referring to a price which has been traded in a volume sufficient to satisfy all the current buyers and sellers at that price.
Value at Risk. Technique used by banks to evaluate the risk of loss on an open position by reference to historic figures.
Variation margin
Additional funds which may be requested (a margin call) to cover any losses on an open position, based on current market values (mark to market). Variation margin is assessed by the clearing house and called for on a daily basis. An open LME position which is in profit against the current market has a positive margin, which can be used in assessing a client’s credit position. On some cash cleared markets positive margin can be paid out to a client whose open position is in profit.
Denotes changes in the value of an option as influenced by volatility in the relevant market.
Virgin metal
Primary metal produced from ore.
Vacuum Oxygen decarburisation. A process for cleaning steel in the ladle by simultaneously placing it under vacuum and blowing with oxygen.
The propensity of a market or price to fluctuate widely and/or suddenly. See also standard deviation.
The total weight of a commodity traded, expressed either in tonnes or lots. Also referred to as turnover. Measured per session, day, month or year.


The document of title to metal stored in an LME registered warehouse. It takes the form of centrally-maintained electronic records under the LME’s SWORD system. See also Lot.
World Bureau of Metal Statistics. Senior UK-based body issuing world non-ferrous metal statistics.
That part of a steel girder between the flanges.
Welded tube
(i) Small-diameter steel or aluminium tube roll-formed from strip and longitudinally HF welded. (ii) Large-diameter steel tube formed from plate and welded. See also ERW and Spiral welded tube.
Wire rod
(i) Steel; Product of first rolling of billet intended for further rolling and drawing to wire. (ii) Non-ferrous; Raw material, commonly 8 mm in diameter, for subsequent drawing to wire. Usually produced continuously by casting and rolling. See also Properzi.
Wood’s metal
Alloy which melts at less than the temperature of boiling water. Contains lead, tin, bismuth and cadmium.
Wrought iron
Iron which has been puddled (hammered) until malleable; it has superior corrosion resistance to steel. Largely but not entirely superseded by steel.
Wrought metal
Metal which has undergone physical deformation during semifabrication, e.g. sheet, tube and wire. As distinct from raw metal or castings.


Zinc ashes
Oxidised zinc removed from the surface of molten zinc, usually in a galvanizing bath. It is then recycled. See also skimmings.
Zone refining
A process for refining metals, usually semi-conductor metals, to a high state of purity (above four nines). A bar of metal is placed horizontally in a suitably-shaped crucible.
A small zone at one end is then induction melted and the zone moved along the bar, carrying
the impurities with it. At the other end of the bar, after solidifying, the zone is cut off. The process may be repeated several times for the highest purities.