June 25, 2013 / 4:00 PM / 5 years ago

Is the 136-year-old London Metal Exchange ready for a woman CEO?

LONDON (Reuters) - Whisper it: The next chief of the London Metal Exchange (LME), where only men take part in the shouted, testosterone-fuelled trading of materials like copper, may be a woman who prides herself on speaking softly.

Men walk past the London Metal Exchange (LME) in London, July 22, 2011. REUTERS/Paul Hackett

Industry sources say Harriet Hunnable, managing director of metals at the CME Group (CME.O), is among potential candidates to be LME chief executive when Martin Abbott leaves the post at the end of this year.

“That’s a super compliment,” Hunnable, said this week when asked about talk of her candidacy. “But I’m enjoying my role at CME group and I’ve got a lot of things to do here.”

The self-described “most quietly spoken fix-it lady in the metals business” declined to comment further.

A new CEO appointment would come at a time of major upheaval at the 136-year-old institution - a legacy of Britain’s former manufacturing clout - that remains the world’s biggest marketplace for aluminum, copper, lead, zinc, tin and nickel.

The LME was sold to Hong Kong Exchanges and Clearing (0388.HK) last year for $2.2 billion in a move reflecting China’s new industrial prominence.

For now, men in business suits conduct often raucous “open-outcry” trading around a circular “ring” at the LME’s Leadenhall St. headquarters in London’s City business district, observing traditions that date to the exchange’s coffee house origins.

There was a woman ring trader but she left.

Much trade on the LME is done electronically or by telephone, rather than in the ring itself, and women are active as traders, clients and exchange staff.


Fix-it skills are much in need at the LME just now.

Fury is growing among its industrial clients, who blame the exchange for letting agonizingly long queues build up for material they have bought via the LME and want to withdraw from warehouses in the global network it oversees.

They say LME rules allow firms running warehouses to make money by building up big stocks and charging for storage while they deliver metal out at a limited rate.

“With Abbott, the big proponent of no change, leaving, the LME is in a better position to make changes to placate customers,” one metals industry source said.

The issue of warehouse backlogs almost derailed the takeover last year.

The latest complaints this week came from The Beer Institute, which represents global brewers and their suppliers struggling to get aluminum for cans at a reasonable price.

It wants an end to the “restrictive and outdated warehousing rules and practices that are interfering with normal supply and demand dynamics” and changes to bring the LME’s warehousing practices in line with other global commodity exchanges.

Meanwhile the CME, where Hunnable works, is looking at expanding its warehouse network as its COMEX copper contract eats into the LME’s dominance in global copper futures.


HKEx Chief Executive Charles Li, asked in Hong Kong about the search for a new LME head, replied: “It could be a he, it could be a she.”

“Everything is on the table,” he told Reuters on the sidelines of LME Week Asia, an industry gathering now under way in Hong Kong.

“We have some very, very high caliber individuals. We have a great franchise and we have great world class leaders. We are very lucky and we are in discussions.”

With European regulators ready to impose new rules on financial markets, the LME’s Chief Operating Officer Diarmuid O’Hegarty is well placed. A solicitor, he became LME executive director of regulation and compliance in 2004, deputy chief executive in 2008 and COO earlier this year.

“He is a strong contender,” one metals industry source said.

Other possibilities are Martin Pratt, chief operating officer at metals trader Triland, and Gavin Prentice, former managing director and global head of sales for Marex Spectron.

But most sources say it’s likely that the next CEO will come from another exchange.

Romnesh Lamba, HKEx co-head of global markets division, said the new CEO was unlikely to come from the Hong Kong exchange and he or she would have to meet British and European regulatory requirements. He ruled himself out as a contender.

Additional reporting by Melanie Burton in Hong Kong; Editing by Anthony Barker

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