The London Metal Exchange saw itself caught in a bind again after it halted nickel trading the same day it reopened the market for the resource today.
The exchange initially suspended the nickel market on March 8 after the price skyrocketed beyond US$100,000/tonne in just a few hours, after Chinese nickel producer Tsingshan Holdings Group covered its massive short position on the resource. It canceled US$3.9 billion worth of trades, plummeting the price back to US$50,000.
The firm also imposed a 5% price limit, up or down, to regulate the trading.
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However, when the nickel market opened today, the price went below the limit at US$45,590. But due to systems error, LMEselect still “allowed a small number of trades to be executed below this lower daily price limit.” This prompted the exchange tp halt once again the nickel trade.
“The LME will continue to investigate the IT system error and will update the market in due course as to a future re-opening of the Nickel market on LMEselect,” the exchange’s statement read.
The news coincided with the announcement by China’s Shanghai Securities News that Tsingshan has reportedly reached an agreement with two companies to “swap its nickel products with a purer form” to close out its short position on the exchange.
Information for this briefing was found via London Metal Exchange, Business Insider, Reuters, CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
