Nickel trading on the London Metal Exchange just melted down for a third time: ‘Credibility is very quickly slipping through their fingers’ – by Will Daniel (Fortune Magazine – March 17, 2022)

The London Metal Exchange is now facing some serious credibility issues after nickel trading was halted for the third time in less than two weeks on Thursday. The second computer glitch in as many days caused yet another shutdown for the 145-year-old metals exchange as it attempts to resume regular trading following last week’s historic short squeeze that caused prices to jump 250% in a single day to over $100,000 a ton.

This time, the halt in trading lasted only until 8:45 a.m. London time, but after Wednesday’s embarrassing series of false starts and more than a weeklong shutdown from March 8 to March 16, the LME will have its work cut out for it to restore confidence to traders in the market.

“Credibility is very quickly slipping through their fingers,” Keith Wildie, head of trading at Romco Metals, told Bloomberg. “It’s eroding very rapidly.” Mark Thompson, executive vice chairman of the trading firm Tungsten West, had stronger words on Twitter, writing that “to cancel #Nickel trades between willing buyers and sellers is unforgivable. UNFORGIVABLE.”

Long-term confidence in the LME shaken

Nickel’s price sank 8% to $41,945 a ton on Thursday in limited trading after the LME widened its daily price change limit from the initial reopening level of 5% in hopes of assisting traders in discovering “the true market price.”

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