The LME Explained: A Singapore Scrap Seller’s Guide
How the London Metal Exchange sets the global price of copper, aluminium, zinc, lead — and why it matters for your scrap metal payout.
If you've ever wondered why Singapore scrap metal prices change week to week, the answer is almost always the London Metal Exchange (LME). This guide explains what the LME is, how it sets global metal prices, and how those prices flow through to the quote you get when you sell scrap.
What is the LME?
The London Metal Exchange is the world's largest marketplace for industrial metals. It operates out of London and has set global reference prices for non-ferrous metals since 1877. Today, over 80% of the world's non-ferrous metal futures trading volume passes through the LME.
Metals traded on the LME:
- Copper — the most heavily traded, and the most important for copper scrap prices in Singapore
- Aluminium — benchmark for aluminium scrap pricing
- Zinc — benchmark for zinc scrap and galvanized steel coating values
- Lead — benchmark for lead scrap and batteries
- Nickel — influences stainless steel scrap prices (304 and 316 have high nickel content)
- Tin — influences tinned copper and solder scrap values
Ferrous metals (iron, steel, HMS, cast iron) are not traded on the LME. They follow regional scrap indices instead — Platts TSI, Argus, or local markets.
How LME Prices Flow to Your Scrap Payout
Scrap isn't pure refined metal — it needs sorting, processing, and smelting before becoming new product. So scrap trades at a discount to the LME refined price. Typical discounts:
| Scrap Grade | % of LME refined price |
|---|---|
| Bright copper (No. 1) | ~90-95% |
| Copper cable (75% yield) | ~65-75% |
| Aluminium extrusion | ~70-80% |
| Brass (yellow) | priced off LME copper + zinc weighted blend |
| Stainless 316 | blend of LME nickel + chromium surcharge |
| Lead scrap | ~85-90% |
| Zinc scrap | ~70-80% |
Additional local adjustments in Singapore: freight to regional smelters, Singapore processing cost, and local supply/demand balance. But the LME direction is the primary signal — if LME copper is up 5% this week, Singapore scrap copper is up roughly 5% too.
How to Read LME Prices
LME prices are quoted in USD per tonne. To convert to the per-kg SGD you'll see on a scrap quote:
- Take the LME price (e.g. USD 10,000/tonne for copper)
- Divide by 1,000 to get USD per kg (= $10/kg USD)
- Multiply by current USD/SGD rate (say 1.35) → SGD $13.50/kg
- Apply scrap discount (e.g. 90% for bright copper) → SGD $12.15/kg
- Subtract processing + freight margin → typical Singapore buying rate
Our live Singapore scrap metal prices page does this math for you — rates updated weekly against current LME and FX.
Why LME Prices Move
- Chinese industrial demand — the single biggest driver. China consumes ~50% of global refined copper and aluminium.
- EV and renewable infrastructure — EVs use 4-5x more copper than ICE cars; solar and wind are copper-intensive. Long-term bullish.
- Mining supply disruptions — strikes, accidents, and political risk in major producers (Chile, Peru, DRC) spike prices quickly.
- USD strength — metals are USD-denominated; a stronger USD typically means lower USD metal prices.
- Inventories — LME tracks warehouse stocks globally; falling stocks signal tighter supply.
Where to Check LME Prices
- LME.com — official source, delayed quotes free, real-time requires subscription
- Trading Economics, Investing.com, Kitco — free aggregators with charts
- Bloomberg, Reuters — professional real-time
- CPER and other copper ETFs — mirror LME copper moves in real-time
LME Warehousing and Singapore
Singapore hosts one of the largest LME-approved warehouse clusters outside of the UK. Major LME warehouses are located in Jurong and Tuas — the same zones where our pickup services operate. This concentration means Singapore scrap dealers have direct visibility into regional supply flows, which can signal price direction before it shows up in the weekly quotes.
Practical Takeaways for Scrap Sellers
- Don't obsess over daily LME ticks for small loads — the payout difference is smaller than the holding cost.
- For large loads (tonnes), consider splitting sales into tranches to average out market risk.
- If LME copper is rallying for 2-3 consecutive weeks, it's usually a good window to sell.
- Any licensed Singapore dealer worth considering will reference the LME on request — transparency is a trust signal.
Frequently Asked Questions
Does Singapore follow LME prices exactly?
Very closely, with a ~3-7% discount for processing and freight. Weekly rate changes at Singapore scrap dealers track LME moves within a few days.
Can I trade scrap metal on the LME directly?
No. The LME is for refined metal contracts (copper grade A cathode, aluminium P1020, etc.). Scrap trades OTC (over the counter) with licensed dealers who then process and sell refined product.
Why is my Singapore quote lower than the LME price?
Because the LME price is for pure refined metal. Scrap needs processing, sorting, remelting, and freight to the foundry — all of which the scrap dealer absorbs. Typical scrap discount: 10-30% depending on grade and cleanliness.
Does the LME price include GST or tax?
No, LME prices are exclusive of local taxes. Singapore scrap transactions are zero-rated for GST for B2B scrap metal supplies. Individuals selling scrap typically receive the net rate without GST complications.
Related Reading
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