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Fresh Chaos for Nickel as LME Hit By Glitch While Prices Plunge
Bloomberg
Fresh Chaos for Nickel as LME Hit By Glitch While Prices Plunge
Mark Burton and Jack Farchy
Wed, March 16, 2022, 5:20 AM
(Bloomberg) -- The London Metal Exchange halted electronic trading in nickel minutes after it restarted, citing a technical issue with its new daily limit, as prices plunged when the market opened after a week-long suspension.
Trading briefly restarted at 8 a.m. and nickel futures immediately fell through the 5% daily window before the market was suspended again. The exchange said it halted electronic trading to investigate the problem and will cancel a “small number” of transactions. Phone-based trading remains open and brokers in the open-outcry floor known as “the Ring” will also trade nickel later today.
The drop in prices is a sign that last week’s historic short squeeze is easing. It narrows the gap between nickel contracts on the LME and those on Shanghai Futures Exchange, which have continued trading during the suspension. Last Tuesday’s historic decision to halt trading came after spiraling prices left some brokers scrambling to pay huge margin calls against bearish positions held by top producer Tsingshan Group Holding Co.
But the forced halt is an embarrassing setback for the 145-year-old exchange, which is the world’s main venue for setting prices and trading some of the most important industrial metals. The LME was already facing harsh criticism before Wednesday’s debacle, after taking the decisions to suspend the nickel market and cancel several hours of trades when a short squeeze sparked a massive price spike last week. ... “What a debacle,” said Ole Hansen, head of commodities strategy at Saxo Bank A/s. “The LME is not doing itself any favors.”
{snip}
Fresh Chaos for Nickel as LME Hit By Glitch While Prices Plunge
Mark Burton and Jack Farchy
Wed, March 16, 2022, 5:20 AM
(Bloomberg) -- The London Metal Exchange halted electronic trading in nickel minutes after it restarted, citing a technical issue with its new daily limit, as prices plunged when the market opened after a week-long suspension.
Trading briefly restarted at 8 a.m. and nickel futures immediately fell through the 5% daily window before the market was suspended again. The exchange said it halted electronic trading to investigate the problem and will cancel a “small number” of transactions. Phone-based trading remains open and brokers in the open-outcry floor known as “the Ring” will also trade nickel later today.
The drop in prices is a sign that last week’s historic short squeeze is easing. It narrows the gap between nickel contracts on the LME and those on Shanghai Futures Exchange, which have continued trading during the suspension. Last Tuesday’s historic decision to halt trading came after spiraling prices left some brokers scrambling to pay huge margin calls against bearish positions held by top producer Tsingshan Group Holding Co.
But the forced halt is an embarrassing setback for the 145-year-old exchange, which is the world’s main venue for setting prices and trading some of the most important industrial metals. The LME was already facing harsh criticism before Wednesday’s debacle, after taking the decisions to suspend the nickel market and cancel several hours of trades when a short squeeze sparked a massive price spike last week. ... “What a debacle,” said Ole Hansen, head of commodities strategy at Saxo Bank A/s. “The LME is not doing itself any favors.”
{snip}