December 9, 2022

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Nickel fell 12% to the bottom again on the London Metal Exchange

Nickel fell 12% to the bottom again on the London Metal Exchange

Traders, brokers and employees on the trading floor of the open scream pit of the London Metal Exchange in London, UK, on ​​Monday, February 28, 2022.

Chris C. Ratcliffe | Bloomberg | Getty Images

LONDON – The three-month benchmark nickel contract fell 12% on Friday morning to hit a new trading limit, as heavy selling continued in international metals markets.

The price reached $36,915 per metric ton when it opened for trading, according to Refinitiv data. The 145-year-old exchange, which still has some open protests, has had two wild weeks with price hikes, technical glitches, and trading suspended.

On March 8, nickel prices more than double Within hours, it soared to over $100,000 a metric ton as one of the world’s largest producers, China’s Tsingshan Holding Group, bought large volumes to reduce its short bets on the metal. Trading had to be halted because the move exacerbated price hikes at a time when metals were already surging with the escalating Russian conflict in Ukraine.

Then on Wednesday, the London Metal Exchange attempted to resume trading nickel after a rare close. But a “system error” allowed a small number of trades to pass below the newly imposed daily rate limit, and the exchange was paused again.

LME installed a trading range of 5% on Wednesday that expanded to 8% on Thursday, then 12% on Friday.

Speaking before the opening on Wednesday, LME CEO Matthew Chamberlain told CNBC’s “Squawk Box Europe” that the exchange was “very aware of the impact this has had on a lot of people and we need to make sure that doesn’t happen again.” “.

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Chamberlain said the LME “deliberately prioritized stability” by setting a relatively narrow range of daily trading limits, but that it could be expanded soon if the exchange notices a “more regulated market”.

Commodity prices jumped on supply concerns related to Russia’s attack on Ukraine, with the ongoing war and a raft of Western sanctions raising fears of turmoil. Besides energyRussia is a major producer and exporter of minerals and grains. In fact, Russia is the world’s third largest producer of nickel – a major component in stainless steel and a major component in lithium-ion batteries.

— CNBC’s Sam Meredith contributed to this article.