On the eve of a critical moment in the market, trading on the London Metal Exchange was interrupted for two hours, affecting metals such as aluminum and zinc.

```

On Monday, electronic trading for all contracts on the London Metal Exchange (LME) was suspended for more than two hours. During the downtime, traders across multiple markets from aluminum to zinc were unable to place orders, and could only wait for the exchange to provide further explanation for the system failure.

This malfunction occurred at a crucial moment for the metals market—just as the market was approaching the third Wednesday of the month, which is when LME contract liquidity is most concentrated. Meanwhile, the Iran war is also causing violent swings in commodity prices.

After trading resumed, an LME spokesperson said the interruption was caused by a problem with the exchange’s main electronic matching engine.

In recent months, the metals market has experienced multiple system failures. On January 30 this year, LME's opening was delayed by an hour; meanwhile, rival exchange operator CME Group had a ten-hour trading suspension last November, disrupting global markets. In addition, during sharp market volatility this January, CME's natural gas market also had a two-minute interruption.

LME launched a new trading platform in March last year as part of a major technology upgrade, partly to improve electronic trading capabilities. Unlike other exchanges, LME still has a large volume of trades carried out by phone and electronic messages. However, after the nickel crisis in 2022, LME has been pushing for more trades to shift onto electronic platforms.

Trading was suspended at 2:44 pm London time and resumed at 5:30 pm. During the downtime, an LME spokesperson said the exchange had noticed the system issue and was trying to fix it as quickly as possible, but it could not be resolved before the close pricing window between 4 pm and 5 pm, so a 'pricing interruption event' was inevitable.

The spokesperson said that the electronic market was in a 'technical pause,' but over-the-counter trading between brokers’ offices could still continue via phone and electronic messages.

LME planned to restore electronic trading via backup servers after the close pricing window ended. Closing prices would be calculated using the exchange’s 'backup pricing waterfall approach.'

According to the method published by LME, this mechanism will refer to the latest traded prices on the electronic platform as well as buy and sell quotes in the wider market. Bloomberg data shows that during the downtime, some of LME’s most active contracts still had bid and ask quotes in the inter-office broker market.

After trading resumed, market prices showed no obvious volatility. Copper prices rose 0.9%, aluminum fell 1.2%, and overall levels were largely unchanged from before the halt.

Risk Disclaimer and Terms of LiabilityThe market carries risks and investment should be made cautiously. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their particular circumstances. Investments made accordingly are at their own risk. ```