Posted Jan 10, 2023, 4:29 PM
LONDON, Jan 10 (Reuters) – The London Metal Exchange (LME), the London-based exchange specializing in metals futures, said on Tuesday it would unveil its action plan by the end of the first quarter. concerning the crisis that affected nickel last year.
Months after the turmoil that hit the nickel market and exposed oversight issues at LME, nickel contracts remain unsettled. Volumes and liquidity are low, leaving the nickel industry without a global benchmark price.
Concerns over Russian supply following the invasion of Ukraine and the liquidation of large short positions peaked on March 8, when the price of nickel doubled to above $100,000 a ton in just a few hours.
The LME was forced to cancel all trades that day, earning it legal action, and suspended the market for the first time since 1988.
He subsequently commissioned an independent report to take stock of the measures to be taken.
Among the recommendations of this report are the extension of the risk control functions of the LME in order to identify and prevent market distortions, the monitoring of risks in the over-the-counter market, the improvement of the preparedness for extreme events or the strengthening of price volatility controls.
“It’s a good, fair report that clearly identifies areas for improvement,” LME chief executive Matthew Chamberlain told Reuters.
The LME has already introduced daily price limits and OTC position reporting for all physically delivered metals. (Report Pratima Desai and Eric Onstad, Blandine Hénault for the French version, edited by)