LME says nickel trading will not resume March 11

Nickel trading will not resume on the London Metal Exchange March 11, as previously established criteria has yet to be met to resume trading, the exchange said in an update March 10.

The LME suspended the trading of nickel March 8 after prices more than doubled to surpass $100,000 mt — reaching a record high of $101,365/mt in early trading, after closing at $48,078/mt March 7.

The criteria to resume trading includes "operational procedures to effect a safe reopening" and analysis of the possibility of "netting-off long and short positions" prior to reopening, the LME said March 8.

"These criteria have not yet been met, and therefore the nickel market will not reopen tomorrow. ... However, the LME is doing everything it can to reopen the market as safely and swiftly as possible," it said in the March 10 update.

When the criteria are met, the LME will inform the market of the date on which resumption of nickel trading will occur, it said.

The LME said it continues to work on appropriate operations measures for a safe reopening, including price bands, both for nickel and for all other physically deliverable contracts. It intends to publish a notice on price bands "as soon as practicable," but this will not be before March 11, the LME said.

In relation to netting off long and short positions, the LME said initial responses indicated limited potential uptake, particularly from those with short positions, and considerable differences in view on the appropriate price. It is continuing to explore this with the market, it said.

As it previously stated, nickel delivery positions will continue to roll forward at level until delivery recommences, on the first settlement business day after the resumption date, it added.

The LME said it has received questions from market participants as to whether it has commenced an investigation into the nickel market and while it cannot comment on any individual set of circumstances, it can confirm that is continually monitors the market for unusual or suspicious trading activity.

"Where such activity is identified, the LME has extensive powers of information gathering (including in relation to OTC trades), investigation and enforcement pursuant to its rulebook, and will use these powers as appropriate," it said.

European steel producers' association Eurofer called on the LME and the UK's Financial Conduct Authority March 9 to take action to stop recent "massive" and "artificial" fluctuations in nickel prices, as nickel is an important element in the production of stainless steel. It is also used to produce batteries for electric vehicles.