Metal-bashing

16 Mar 2022 By George Hay Follow @gfhay

The London Metal Exchange again suspended trading in the energy transition material, a week after wiping trades. The latest mess means custom is already heading elsewhere. The LME’s best hope is that a lack of oven-ready alternative venues leads to a degree of inertia.

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The London Metal Exchange (LME) is considering allowing the price of nickel to rise or fall by more than 5% a day from March 17. The bourse reopened trading in the metal with new price limits on March 16 but then swiftly halted transactions when the price fell by the maximum amount allowed.

The LME introduced price limits of 5% above or below the last closing price for nickel to prevent wild price swings, but said that technical issues allowed a small number of trades to go through below Wednesday’s new lower limit.

“As the market opened (the electronic system) discovered an opening price of $45,590,” the LME said. “Unfortunately, due to a systems error, LMEselect then allowed a small number of trades to be executed below this lower daily price limit.”

The exchange said all trades executed on the LMEselect system at the lower daily limit would remain, but that it would cancel all trades below the threshold. The telephone market, or inter-office trading, remained open.

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