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London Silver Price Benchmark: W.I.P. Update

Richard Firth, our guest blogger, provides an update on developments regarding the replacement of the silver fix benchmark.

Steps are being taken to develop a new global silver price benchmark when the 117 –year London silver fix, operated by The London Silver Market Fixing Limited, is disbanded from August 14th.

The trade body for London’s USD 1.6tn-a-year silver market, the London Bullion Market Association (LBMA), said[1] last week that it:

  1. Has completed a Silver Price Consultation survey which was contributed to by more than more than 440 participants, including mining companies, users of the existing benchmark, regulators and potential administrators. The general consensus was that the silver pricing mechanism should be an electronic, auction-based solution. The solution must be tradable, with an increased number of direct participants;
  2. Has launched a Request for Proposals from all those companies who had expressed an interest in becoming the price administrator for the silver price; and
  3. Is organising a seminar on 20th June for LBMA members to provide feedback on the proposals received.

Those reported in the press to have expressed an interest in becoming price administrator include a number of industrial and financial players in the market, including two major metal exchanges:

  • The London Metal Exchange (LME);
  • The Chicago Mercantile Exchange (CME);
  • ETF Securities; and
  • Platts.

 

[1] LBMA Press Release: Thursday, June 5th:

http://www.lbma.org.uk/_blog/lbma_media_centre/post/SILVER_SURVEY_RESULTS/

See also: Financial Times: Thursday, June 5: ETF Securities enters race to provide silver price benchmark

http://www.ft.com/intl/cms/s/0/e8fdeabc-ebe6-11e3-8cef-00144feabdc0.html#axzz346lPs7Wx

Reuters: Thursday, May 29 : UPDATE 2, CME ,LME compete to provide alternatives to London silver fix

http://www.reuters.com/article/2014/05/29/silver-fix-idUSL6N0OF3D320140529

 

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