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 has been in close dialogue with the Special Committee and has been monitoring closely the LME market and the impact of the evolving situation in Russia and Ukraine. This was not lost on the nickel market, and as the price moves during Asian hours this morning has demonstrated, the LME has decided on orderly market grounds," the notice added.

The LME three-month spot nickel price reached a record high of $101,365/mt in early trading on March 8 after closing at $48,078/mt on March 7. It was at $80,000/mt as of 0815 GMT when the suspension took effect.

Nickel posted an unprecedented surge of $10,000/mt, 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 due to “bears covering their short positions,” according to a note from ING dated March 8.

In addition to suspending trading in LMEselect and halting trading on the Ring, the LME also directed that there should be no inter-office trades booked for nickel.

LME Clear said it would assess what further measures, if any, needed to be taken from a risk management perspective. The LME added that it would take a proactive approach to planning the reopening of the nickel market and would provide further details as soon as possible.

“The LME will consider a potential multi-day closure in the context of the geopolitical situation that is the root cause for recent price movements. The LME will be making arrangements to manage future deliveries in this context,” the exchange stated.