Core Viewpoint - The London Metal Exchange (LME) unexpectedly suspended all non-USD denominated metal options, including those in RMB, without prior notice or explanation, indicating a targeted approach towards the RMB market [1] Market Reaction - Following the announcement, the main aluminum and copper contracts on the Shanghai Futures Exchange hit the upper limit, while LME electronic trading saw a significant drop, with the price difference reaching $412 per ton, marking a historic occurrence in 38 years [3] - Traders noted that USD-denominated metals have become isolated, while RMB-denominated metals are gaining popularity, reflecting a shift in market dynamics [3] China's Position in Metal Trade - China contributes 70% of global rare earth oxides and 55% of electrolytic aluminum, with nearly half of copper consumption growth driven by China [3] - Major Middle Eastern steel manufacturers plan to reference Shanghai futures prices and settle long-term metal orders in RMB starting from Q4 2025, with Dubai also set to launch RMB-denominated metal futures in 2026 [3] Adoption of RMB in Global Trade - Major mining companies like BHP and Vale have begun accepting RMB for iron ore transactions, driven by the convenience and cost-effectiveness of using RMB in trade with China [5] - The cross-border RMB payment system has expanded to 32 countries, with bilateral currency swap agreements exceeding 4.5 trillion RMB, and RMB cross-border payment amounts reaching 35 trillion RMB in the first half of the year, a 14% year-on-year increase [5] LME's Weakness and Market Dynamics - LME's actions reveal its weaknesses, as actual trading has shifted to other markets, with contracts still being signed and settled despite the suspension [7] - The RMB's rise is attributed to its alignment with production, demand, and convenience, rather than an aggressive pursuit of dominance [7] Future Trends - The trend of using RMB for metal trade settlements is expected to grow, with more countries and companies likely to follow suit, indicating potential challenges for LME's traditional rules [8]