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LME failure with nickel puts Shanghai in charge of price discovery, trader says
London Metal Exchange Suffers Fresh Glitch as It Attempts to Restart Nickel Trading
Neil Hume and Philip Stafford
Financial Times, London
Wednesday, March 16, 2022
The London Metal Exchange suspended electronic trading in nickel on Wednesday, just moments after the world’s main market for the metal reopened for business following a week-long shutdown.
Wednesday’s fresh trading halt came after the price of nickel tumbled when the market opened. Newly installed curbs to support the resumption were meant to prevent the price from declining by more than 5%, but some trades appeared to have breached the limit of $45,590 a tonne, according to Refinitiv data.
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The LME said it would halt electronic trading to "investigate" the issue, but that it would still allow in-person dealings later in the day around the famous red sofas on its Ring venue, and also through an inter-office telephone exchange between members.
"The scale of sell orders illustrative of the mood in the market -- longs just want to get out of a market that has become and is likely to remain dysfunctional," said traders at Marex. ...
Ole Hansen, head of commodities strategy at Saxo Bank, said Wednesday's trading halt was a "desperately sad situation" for the LME, which prides itself on being the leading global marketplace for metals trading.
"The limit was too small," he said. "Shanghai is the de-facto centre for price discovery right now." ...
... For the remainder of the report:
https://www.ft.com/content/6a640cd5-3d9b-421d-bc71-8e4d0f2f9522
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