[ad_1]
Text size
A view of the nickel electrolysis workshop at Kola Mining and Metallurgical Co., a unit of Russia’s metals and mining company Nornickel.
Kirill Kudryavtsev/ AFP via Getty Images
Nickel prices dropped 5%, the new daily limit set by the London Metal Exchange, and electronic trading was then halted soon after opening with the exchange saying it was investigating a “potential issue with the limit-down band.”
In a statement Wednesday, the LME said, “Following re-open, the market moved to its limit-down pricing band. We have now stopped the electronic market to investigate a potential issue with the limit-down band, and will update the market in due course.”
The LME said in an updated statement that electronic trading would reopen at 2 pm in London.
A little more than 200 lots were traded before the market was halted, according to Bloomberg. Most of the trades took place at the limit price of $45,590 a ton. The LME said a “small number” of nickel trades executed below the lower daily price limit will be cancelled.
The LME said inter-office market trading continued on Wednesday, as did dealings in its famous “Ring,” where trading is done via open-outcry.
The exchange suspended nickel trading last week following an unprecedented price surge that saw the metal top $100,000 a ton.
The LME had suspended trading on March 8, and canceled all trades after what it called an “unprecedented” price surge. Prices that day spiked by 250%. The exchange also outlined new rules to prevent extreme price moves in nickel and other metals, saying it would allow nickel to rise or fall “at least 5%” daily.
Behind the price surge was the struggle by metals tycoon XiangGuangda to pay massive margin calls to his banks and brokers, Bloomberg has reported. Xiang’s company, Tsingshan Holding Group, was reported to have racked up billions of dollars in losses from wrong-way bets on nickel.
The LME said late Monday it was reopening the nickel market after “a large client of the market has now published details relating to the support of a banking consortium, which could suggest that the potential for further disorderly conditions may be mitigated.”
The LME was referring to Tsingshan, which reached a provisional deal with banks that have agreed not to close out Tsingshan’s trading positions or impose further margin calls on the company, The Wall Street Journal reported.
Write to Joe Woelfel at [email protected]
|
Sources 2/ https://www.barrons.com/articles/nickel-resumes-trading-london-metal-exchange-51647353349 The mention sources can contact us to remove/changing this article |
[ad_2]