The London Metal Exchange’s two-week-long inability to facilitate the free flow of nickel trades has locked up the nickel market from investment and sowed uncertainty across the metal’s supply chain.
The LME provides crucial price transparency for nickel suppliers and buyers negotiating long-term nickel supply deals and gives critical signals to financers looking to back production capacity growth amid high prices.
But the exchange has been gripped by chaos since March 8, when a short squeeze sent the three-month nickel price to over $100,000 per tonne, leading to the suspension and cancellation of trades for that day.
Trading stopped until March 16, when circuit breakers were again tripped after only a brief trading period as prices fell below a lower limit set by the LME. Electronic trades were sparse and halting through March 18.