THE GEOGRAPHICAL REACH OF A COMMODITY-EXCHANGE - THE LONDON-METAL-EXCHANGE AND BEYOND

The characteristics of commodity exchanges are outlined. The need of t he buyer to accept delivery from a warehouse selected by the seller co nstrains the geographical reach of an exchange. LME extended its wareh ouse network from 1960 to 1991 to the continent, Scandinavia, the Medi terranean, Singapore, Japan and the USA. The actual use of the warehou ses from 1992 to September 1995 is studied by location and region. Jap an is problematic, the USA holds promise, Singapore is gratifying and Europe is doing very well. The youth of the overseas locations, combin ed with the industry structure of their regional economies, explains m uch. Emerging competition by the Shenzen Metal Exchange raises the que stion of a second ring in the Asian time zone.