The London Platinum and Palladium Market (LPPM) is an

over-the-counter Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...

trading centre for

platinum Platinum is a chemical element with the symbol Pt and atomic number 78. It is a dense, malleable, ductile, highly unreactive, precious, silverish-white transition metal. Its name originates from Spanish , a diminutive of "silver". Pla ...

and

palladium Palladium is a chemical element with the symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal discovered in 1803 by the English chemist William Hyde Wollaston. He named it after the asteroid Pallas, which was itself na ...

and a commodity trading association. London has always been a centre for the research in and development of most of the platinum group metals. Trade was established in the early 20th century, typically by existing dealers of gold and silver. The LPPM has been involved in fixing the world market prices of platinum and palladium since 1989.

History

Trading on the London Platinum and Palladium Market has a much shorter history than the trading on the

London Bullion Market The London bullion market is a wholesale over-the-counter market for the trading of gold and silver. Trading is conducted amongst members of the London Bullion Market Association (LBMA), loosely overseen by the Bank of England. Most of the member ...

, which is performed since the 17th century. London has been a historically important centre for platinum and palladium. The trading was initiated at the beginning of the 20th century, alongside the longer-established bullion metals. In 1973, metal dealers established "London Platinum and Palladium Quotation"—a forerunner of the fixings. The prices for platinum and palladium were settled twice a day on the spot market. In 1979, leading dealers from London and Zurich signed an agreement to standardize the origin and specifications of the metals of the

good delivery The Good Delivery specification is a set of rules issued by the London Bullion Market Association (LBMA) describing the physical characteristics of gold and silver bars used in settlement in the wholesale London bullion market. It also puts fort ...

quality. On 5 May 1987, the London Platinum and Palladium Market was established with close assistance by the Bank of England, which was the regulator of the precious metals market at that time. Currently, the primary regulatory authority in the UK is the Financial Services Authority. In 1989, the quotations of platinum and palladium were expanded to full-fledged fixings.

Price determination

Twice per working day, the platinum and palladium fixings are set via telephone calls: *Morning: Monday to Friday, at 9:45 UTC (10:45 CET) *Afternoon: Monday to Friday, at 14:00 UTC (15:00 CET).

Members

Full members

BASF BASF SE () is a German multinational chemical company and the largest chemical producer in the world. Its headquarters is located in Ludwigshafen, Germany. The BASF Group comprises subsidiaries and joint ventures in more than 80 countries ...

Metals * Goldman Sachs International * Heraeus Metals Germany GmbH & Co. KG * HSBC Bank USA NA London Branch *ICBC Standard Bank PLC *

Johnson Matthey Johnson Matthey is a British multinational speciality chemicals and sustainable technologies company headquartered in London, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. History Early years Jo ...

JP Morgan Chase Bank JPMorgan Chase Bank, N.A., Trade name, doing business as Chase Bank or often as Chase, is an American national bank headquartered in New York City, that constitutes the retail banking, consumer and commercial bank, commercial banking subsidiar ...

* Metalor Technologies *

Mitsui & Co is one of the largest ''sogo shosha'' (general trading companies) in Japan; it is part of the Mitsui Group. History The company was established in 1876 with 16 members including the founder, Takashi Masuda. As Japan's international trading w ...

Precious Metals Inc (London Branch) * PAMP SA * Standard Chartered Bank * Tanaka Kikinzoku Kogyo * The Bank of Nova Scotia *

UBS AG UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swis ...

* Valcambi

Trading

Twice each working day, four LPPM members (banks, producers, refiners, fabricators, manufacturers and distributors) fix the bid prices. The bid price is one at which members of LPPM guarantee that they will buy good delivery metal. The bid prices for the metals are benchmarks for the market and therefore for the industry. The bid prices, in turn, affect the offer prices that customers are asked to pay for metal. The market values of the metals, as is the case for all commodities, ultimately affect manufacturing costs. Unlike a futures exchange, an OTC market offers some flexibility and confidentiality of transactions carried out between two entities. Many transactions are speculative; only a fraction of deals are closed via a physical delivery.

References

External links

* {{Economy of the United Kingdom Commodity exchanges in the United Kingdom Organisations based in the City of London Futures exchanges 1973 establishments in the United Kingdom Organizations established in 1973 Bullion dealers