Cargill Inc. plans to apply for Category 2 membership of the London Metal Exchange, it said on Wednesday, as the agricultural merchant makes its first foray into base metals derivatives sales as European banks retreat.
Reuters reports that privately held Cargill's push into trading structured products and derivatives comes as Barclays and Deutsche Bank exited the fiercely competitive commodities derivatives market as tighter regulation squeezes margins.
Fee increases planned by the LME, the world's largest and oldest metals exchange, for next year will also increase the costs of transacting in the open outcry pit and electronic platform, brokers have warned.
To lead the push, the company has hired metals veteran Mike Frawley as managing director of global metals.
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