LME select nickel trading resumes after hiccup

The London Metal Exchange (LME) suspended nickel trading on LMEselect on Wednesday morning shortly after it had restarted due to an IT system error. Trading then resumed again at 14:00 GMT.

In the morning, upon reopening, the uncrossing algorithm discovered an opening price of $45,590/tonne – the lower daily limit – but then LMEselect allowed a small number of trades to be executed below this lower daily price limit.

All nickel trades executed on LMEselect at the lower daily price limit remained valid. The small number of nickel trades executed on LMEselect below the lower daily price limit were cancelled.

The inter-office market and the Ring continued to operate as normal for nickel trading, with the daily price limits still in operation. LMEselect remains open for trading of all other contracts.

The LME resumed nickel trading at 08:00 GMT on Wednesday and applied upper and lower price limits to all outright contracts in all base metals on all execution venues. Nickel trading was initially suspended on Tuesday last week after nickel prices reached an unprecedented $101,365/t (see Kallanish passim).

The exchange said it is carrying out a review of trading activity and nickel market conditions leading up to the suspension. If the review indicates abusive activity by one or more participants, LME could commence a formal investigation.

Adam Smith Germany