UPDATE 1-London Metal Exchange to introduce $1 OTC fee on June 1

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LONDON, March 1 (Reuters) - The London Metal Exchange (LME) plans to introduce a fee from June 1 for off-exchange, over-the-counter (OTC) contracts that reference its prices to try to boost revenue after it slashed other fees last year.

Details of the $1 per OTC contract fee in an LME statement on Thursday were largely in line with a consultation about the fee it held in recent months, although it delayed imposing the fee for two months.

The exchange, the world's oldest and largest market for industrial metals, had previously planned the fee from April 3.

"We are confident that the proposal is transparent, fair and non-discriminatory," Adrian Farnham, chief executive of LME Clear, the exchange's clearing house, said in a statement.

The LME, owned by Hong Kong Exchanges and Clearing Ltd. , announced the OTC fee in September, designed to help balance the loss of income from cuts for other exchange fees aimed to help reverse declining volumes.

LME revenue last year from trading fees and tariffs fell 9 percent to HK$1.1 billion ($141 million) while overall volumes for the year rose by just 1 percent, HKEX said on Wednesday when releasing its results.

The $1 per OTC contract charge aims to narrow the cost difference between trading on the LME and over the counter, where volumes grew rapidly after the exchange raised fees by 31 percent on average in 2015.

Some users have warned the fee could reduce trading or push business to other venues such as the CME or NFEx, a new platform due to launch this year.

To address those concerns, the LME decided to narrow the scope of the fee to include roughly only half of an estimated 20 million OTC trades a year, which would earn it about $10 million a year.

The new OTC fee policy excludes structured products and financing trades.

"We were particularly pleased that client feedback to the consultation suggested that the new financial OTC booking fee would not significantly impact their trading activities, Farnham said.

($1 = 7.8274 Hong Kong dollars) (Reporting by Eric Onstad Editing by Susan Fenton and Mark Potter)