LME to resume nickel trading

The London Metal Exchange (LME) will resume nickel trading at 08:00 GMT on Wednesday and apply upper and lower price limits to all outright contracts in all base metals on all execution venues.

The LME suspended nickel trading on Tuesday last week after nickel prices reached an unprecedented $101,365/tonne (see Kallanish passim).

“Whilst price moves in the nickel market have been a key focus, the LME has observed high levels of volatility across the base metals markets more broadly. Market participants have raised concern regarding the risk of sudden, extreme price moves in other metals, particularly given the geopolitical backdrop,” LME says. The precise levels of the limits for nickel will be confirmed by notice by 14:00 London time on 15 March.

The upper daily price limit for any outright contract will be the previous business day’s closing price for that contract, plus for nickel, at least 5% having previously guided 10%, and will keep under review in light of market conditions.

The LME also confirms the deferral of delivery to 23 March at level of all nickel contracts entered into prior to 16 March and due for delivery between 16 and 22 March inclusive.

“The LME shall undertake heightened monitoring on all trading following the resumption of nickel trading,” it says. “The LME’s review of trading activity and nickel market conditions leading up to the suspension is ongoing, and will be informed by the information obtained under its information gathering powers in the LME Rulebook. If that review indicates that there may have been abusive activity by one or more participants, either on the LME’s market or on the LME in combination with the OTC market, the LME has powers under the LME Rulebook to commence a formal investigation.”

Adam Smith Germany