BHP’s Nickel Shutdown Derails Plans for LME Alternatives
Global Commodities Holdings Limited (GCHL) and Abaxx Technologies Inc., two new nickel trading platforms aimed at challenging the London Metal Exchange (LME), have been forced to delay their launches due to recent industry developments.
Mining giant BHP Group Ltd (ASX: BHP) decided to suspend its nickel operations in Western Australia. The company, which had previously supported these new platforms, cited an oversupplied market and falling prices as reasons for the suspension.
GCHL, led by former LME CEO Martin Abbott, had planned to launch its physical metals platform in April. Abaxx was set to introduce the first-ever nickel sulphate contract for electric vehicle batteries. Both platforms were counting on BHP’s nickel volumes to establish themselves as viable alternatives to the LME.
The LME has faced criticism since the March 2022 nickel market meltdown, where prices surged to over $100,000 per metric ton before trading was halted. This event prompted calls for reform and alternative trading options to the 147-year-old exchange.
Now, without BHP’s commitment, both GCHL and Abaxx are searching for other sources of nickel supply. GCHL is adapting its platform to include nickel from all non-sanctioned origins, acknowledging the significant role of Indonesian and Chinese producers in the global market.
The nickel market remains volatile, with LME prices dropping more than 80% since their 2022 peak. This decline is partly due to increasing stocks in LME warehouses since August 2023.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
