Base metals are malleable, ductile, and corrode relatively easily. Such properties have found widespread use in various industries. In today’s world, industrial and technological advances have increased the requirement to improve physical infrastructure in developing economies, thereby increasing the demand for base metals. Investors and metal buyers have thus developed the base metal market into a more mature market.

This tutorial looks at the fundamentals of trading in the various base metals markets: copper, aluminium, zinc, nickel, lead, and tin. It also describes in detail how the London Metal Exchange (LME) facilitates trading for base metals on a worldwide basis.

Objectives
On completion you should be able to:

• Describe the key features of base metals and the participants in the base metals market
• Explain the fundamentals of base metals pricing, and identify the various elements that affect prices
• Describe the process of hedging and trading in the base metals market