LME resumes nickel trading after delayed opening, sets new price limits
- HKEX-owned bourse expands daily price limit from 5 per cent to 8 per cent above or below prior closing price
- LME is seeking return to normality after wild price swings forced weeklong suspension in nickel trading
The London Metal Exchange (LME) faced another chaotic start to nickel trading on Thursday, as it tried to return to normal after suspending trading for the metal last week for only the second time in its 145-year history amid an unprecedented surge in prices.
On Thursday, the bourse, which is owned by Hong Kong Exchanges and Clearing (HKEX), increased the circuit breaker for nickel prices from 5 per cent to 8 per cent above or below the prior day’s closing price in hopes of further opening up the market.
However, the LME was forced to delay the opening of the nickel market by 45 minutes on Thursday morning after Bloomberg reported that some traders were unable to enter trades at the new lower price limit. A handful of trades that did go through were cancelled by the bourse.
When the market opened, the price for nickel fell 8 per cent to US$41,945.
The delayed reopening came amid a tumultuous period for the LME, as Russia’s invasion of Ukraine has prompted wild swings in commodity prices, from oil to wheat to metals.
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The price of nickel surged more than 250 per cent in a 24-hour period last week, forcing billions of dollars of margin calls and prompting the LME to suspend trading on March 8 and to cancel orders to guarantee market stability.