The London Metal Exchange (LME) today announced the next steps in its plans to develop sustainable metal premium pricing for LME-approved brands.
These include the launch of a new HKEX Group company in Dubai that will serve as the pricing administrator, and the publication of a discussion paper on its proposed pricing methodology.
Matthew Chamberlain, LME Chief Executive Officer, said:
“Our goal is to publish premium prices for sustainable metals, underpinned by robust definitions and real trading activity – which will enable our industry to unlock the potential value of sustainable metal production. We recognise that there may not be a premium for every metal, but there is a clear market desire to determine whether one exists and the LME is keen to play a part in answering this question.”
The LME announced its plans to explore the potential for producing sustainable metal premium pricing in April 2025. The roadmap published today sets out more detail on the LME’s approach to sustainable metal premium price discovery – built on the foundational pillars of standardisation and transparency – as well as the important role of the pricing administrator and the link between sustainable metal and critical minerals supply security.
The LME’s solution is based on the following key components:
- LME brand list – all LME branded metals must meet the LME’s existing market-leading quality and responsible sourcing standards, ensuring that core globally agreed sustainability standards are incorporated into all areas of the LME’s activities. These will remain unchanged and the LME will work towards discovering premium prices for copper, aluminium, nickel and zinc that are both LME-branded and possess enhanced sustainability credentials, going beyond the core globally agreed sustainability standards, but which are of increasing importance for many metal consumers.
- LMEpassport transparency – LME brands already disclose sustainability data on LMEpassport, the LME’s free-to-access digital credentials register – which currently holds over 1,300 disclosures from LME-listed brands. Premium sustainability thresholds – following significant market engagement, the LME has now set out its premium sustainability thresholds for each metal, incorporating both maximum carbon footprints and third-party sustainability assurances, based on internationally recognised methodologies. These thresholds will be maintained by the LME and kept under review.
- Trading platform – metal of LME brands whose LMEpassport disclosures meet the premium sustainability thresholds will be eligible for trading on the sustainable metals segment of the Metalshub digital platform. Metalshub is a strategic partner of the LME whose platform already enables consumers to buy LME-grade low-carbon nickel. Since March last year, 1,942 tonnes of low-carbon nickel have been offered through the platform with 488 tonnes traded.
- Pricing administrator – in order to produce pricing for metal that meets the premium sustainability thresholds, the newly incorporated HKEX Group company – Commodity Pricing and Analysis Limited (CPAL), located in Dubai – will act as an independent price administrator. In the coming months, CPAL will build out its operations with the aim of publishing premia, based on transparent transactions executed on Metalshub (and augmented where necessary with market intelligence based on physical trading of metal which meets the thresholds).
The discussion paper, also published today, seeks views on the proposed methodologies the pricing administrator will use to determine premia for LME-branded metal meeting the premium sustainability threshold that trades on Metalshub. The proposed primary basis for determining the pricing for each metal will be arm’s length transactions conducted on Metalshub. If there are insufficient trades, then bids, offers and/or assessments made by the pricing administrator would be used. All relevant data would be reviewed to ensure consistency and integrity and then normalised to take account of commercial factors such as delivery location and contractual terms.
The feedback from the discussion paper will be used to finalise the methodology which CPAL will be responsible for applying and updating in future.
Commenting on the launch of CPAL, Georgina Hallett, Chief Sustainability Officer and Head of Physical Markets, said:
“I’m thrilled that we have made such quick progress that we are now able to announce the incorporation of CPAL in Dubai, a location that provides us with both the agility to respond quickly to market developments and the access to a rapidly developing international metals centre.”
CPAL was granted a licence by the Dubai International Financial Centre (DIFC) in September 2025.
