LME copper refers to copper traded in London, where options and futures contracts for industrial metals are traded. The term may refer to spot LME copper prices or prices for futures contracts on the London exchange. LME copper futures contracts may be set at up to three months with daily expiration dates, or between three and six months with weekly expiration dates. There are also longer contracts of up to 123 months. Contract prices are quoted in US dollars and are sold in lots of 25 MT. They may be settled via physical delivery between a network of LME-approved warehouses around the world. For this reason, LME copper may also refer to inventories of copper cathode in LME warehouses. In addition to acting as a futures trading exchange and providing reference prices, the LME acts as a physical market of last resort for producers and consumers of a number of metals, including copper. In other words, those in the copper industry may sell LME copper during oversupplied markets and draw on LME copper inventories in the event of a copper shortage. Some market watchers look to rising and falling inventory levels on the LME as an indicator of global supply and demand conditions. However, it’s important to note that physical delivery is the exception rather than the norm. The exchange also publishes daily reference prices for LME copper and other metals that are used by market participants. Overall, the exchange is predominantly used to either hedge or take on price risk.