The London Metals Exchange, which suspended its nickel trading on March 8, does not anticipate it will resume before March 11 and said it was premature to set a date for resumption amid uncertainty in the broader market stemming from the Russian invasion of Ukraine.
LME Nickel Market Suspension
The London Metal Exchange (LME) said in an emailed market notice that it had opted to suspend trading for the rest of March 8 from 0815 GMT following "unprecedented overnight rises in the three-month nickel price."
The LME three-month spot nickel price soared to an all-time high of $101,365/mt in early trading, after closing March 7 at $48,078/mt, leading the LME to suspend trade. When suspended, it had returned to $80,000/mt as recently as 0815 GMT. The LME also canceled all trades done in the inter-office market and on LMEselect from 0000 GMT on March 8 until further notice after the suspension.
Nickel posted an unprecedented surge, with prices rising as much as 70%, UK brokerage Sucden Financial said on March 8, adding that the cash to three-month spread tightened into $841/mt — the most extreme backwardation since 2007. The spike was driven by “bears covering their short positions,” according to a note from ING.
In its later update, the LME said the criteria for reopening included establishing operational procedures for a safe return to trade and analyzing the feasibility of “netting-off long and short positions” prior to reopening. “We can confirm that all clearing members have met their margin obligations to LME Clear in full at this time,” it said.
“The LME recognises that the wider commodities markets are experiencing stress on credit conditions due to geopolitical developments and elevated prices,” it added. The LME intends to publish a resumption date by no later than 1400 GMT on the previous business day. Nickel delivery positions will roll forward at par until delivery resumes, on the first settlement business day after the resumption date.
It also decided to defer delivery under all physically settled nickel contracts due for delivery on March 9 and any subsequent prompt date deemed impracticable due to the trading suspension. During this suspension, the LME said it would not publish official or closing prices for nickel contracts, though internal systems would continue to calculate indicative values.
While other metals contracts on the LME remain active, the exchange stated it would closely monitor trading conditions. Several Western nations have sanctioned Russia over its military assault on Ukraine, isolating Russian commodity firms from global financial markets.
The London Stock Exchange on March 5 suspended trading in global depository receipts of several Russian companies, including Norilsk Nickel, the world’s largest refined nickel producer. Russia as a whole accounts for roughly 7% of global nickel output.
