LME halts nickel trading again as system error disrupts reopening
The London Metal Exchange suspended nickel trading again this morning due to a “system error”, less than two hours after reopening following a surge in prices last week that left short sellers facing record losses.
In a statement today the exchange said it had shuttered trading again due to an error which had led to some trades to be executed below the new price limits laid out by the exchange.
The LME set out price limits before reopening today to prevent a repeat of the chaos last Tuesday, when it suspended trading as prices roared to record highs above $100,000 a tonne.
In a statement the exchange said: “As the market opened, the uncrossing algorithm discovered an opening price of $45,590 (which was the lower daily price limit, i.e. 5% below the prices published in Notice 22/067) for 3-month Nickel.
“Unfortunately due to a systems error, LMEselect then allowed a small number of trades to be executed below this lower daily price limit.
“The LME immediately decided to suspend Nickel trading on LMEselect while the system error is investigated.”
The LME said that all nickel trades executed at the lower price on LMEselect, its trading system, would now be cancelled.
The decision follows a highly controversial move from the LME to cancel $3.9bn worth of trades last Tuesday as the market surged.
The volatility in commodities has led some traders to abandon the exchange, with Luke Sadrian, boss of Commodities World Capital, saying last week he had exited all of his LME positions after trading was suspended, “despite being ragingly bullish on copper.”