London Metal Exchange CEO: Nickel surge threatened market stability, forced bourse’s hand
- Decision to suspend trading, cancel trades ‘something we never wanted to have to do’, Matthew Chamberlain says
- More oversight needed of over-the-counter positions away from the exchange: CEO
Allowing those trades to stand would have had a “very significant systemic” effect on the market, from physical users of the metal forced to price and hedge at levels that “clearly didn’t reflect reality”, to billions of dollars in margins calls for positions held on and off the exchange, Chamberlain said.
“The decisions we took were extraordinarily difficult ones. I believe they were right, but I also fully understand the very real and genuine anger of those who didn’t agree with those actions,” Chamberlain told the Post. “As an exchange you have to make decisions and you have to make decisions you consider to be right. Our task is to ensure we are never in a position where we ever have to do that again.”
02:11
Oil prices skyrocket around the world as result of Russia-Ukraine conflict, sanctions
While the moves were more extreme, nickel is not the only metal to see volatility on the LME due to the broader geopolitical and macroeconomic environment. Both copper and aluminium have seen price increases and daily volatility, Chamberlain said.