The LME Insight methodology published this month sets out how LME Insight will assess and publish sustainable metal premiums for aluminium, copper, nickel and zinc. The document describes the eligibility framework, the hierarchy of price inputs, the normalisation process, and the governance arrangements that apply to these assessments.
Eligibility and sustainability criteria
The methodology applies to premiums associated with LME-listed brands that meet the sustainability requirements defined under the LME’s sustainable metals framework. Eligibility is evidenced through verified disclosures submitted by producers via LMEpassport.
Sustainability criteria determine whether a brand is eligible for inclusion in the assessment process, rather than establishing the level of any premium. Only transactions involving eligible brands with verified producer submitted sustainability disclosures can qualify for consideration.
Observation window and data cut off
Assessments are published monthly at launch. Each assessment reflects market activity during an Observation Window covering the month prior to publication.
All qualifying data must be received by 17.00 London time on the final business day of the window. Late submissions are carried forward into the next period and do not trigger revisions.
Price input hierarchy
LME Insight’s assessment process is transaction led, with executed trades ranked highest in the hierarchy.
Category 1 inputs consist of qualifying executed transactions sourced from Approved Spot Trading Platform(s) and from Secure Bilateral Transaction Reporting to LME Insight. Category 1 is considered sufficient only if minimum requirements are met, including at least three qualifying transactions involving at least two distinct buyers and two distinct sellers, alongside metal specific minimum trade size and total volume thresholds.
Where Category 1 depth is insufficient, the methodology sets out a structured fallback process:
Category 2: executable bids and offers visible on chosen spot platform
Category 3: other independently verifiable market evidence, such as tender results or documented bilateral deals
When liquidity is limited, the methodology applies a fallback weighting of 70% Category 1, 20% Category 2 and 10% Category 3 to ensure assessments remain anchored to executed transactions wherever possible.
Transaction reporting and sources
Qualifying transactions may be sourced from the spot trading platforms or reported directly to LME Insight, provided they are independently confirmed as arm’s length, meet minimum size thresholds, and relate to eligible LME-listed brands with verified producer submitted sustainability disclosures on LMEpassport.
Category 1 incorporates a defined weighting between platform executed trades and securely reported bilateral transactions, reflecting the hierarchy of evidential strength.
Normalisation and outlier management
The methodology includes procedures to normalise reported information to support comparability across transactions. Adjustments account for logistics, delivery terms, tariffs, taxes, regional premia and timing differences.
Unless otherwise specified, transactions are standardised to a 90-day delivery period.
Outlier rules are applied across all categories and inputs prior to calculation. Observations that deviate materially from prevailing market indications are flagged for expert review, with decisions to retain or exclude recorded alongside documented rationale. Outlier outcomes are applied before calculating either the Category 1 VWAP or the 70/20/10 fallback assessment.
Governance and publication
LME Insight acts as the independent pricing administrator responsible for applying the methodology.
Governance provisions include audit trail retention for at least five years, operational separation of pricing administration, senior oversight of expert judgement decisions, and formal consultation processes for future amendments.
Publication is set at a monthly frequency at launch, reflecting the current level of observable liquidity in sustainable metal premium transactions, with the potential to increase frequency as market depth develops.
Summary
This methodology describes how LME Insight will determine and publish sustainable metal premium assessments based on qualifying market activity, within the eligibility structure defined under the LME’s sustainable metals framework.
The framework is designed to be transaction-anchored, transparent, and governed by documented normalisation procedures, structured input hierarchies, and robust oversight arrangements.
