LME launches sweeping plan to revive nickel contract

LME launches sweeping plan to revive nickel contract

The London Metal Exchange (LME) on Thursday launched sweeping measures to revive its flagging nickel contract, including plans to cut waiting times and scrap fees for new brands of nickel that can be delivered against its contract.

The world’s largest and oldest metals trading venue, owned by Hong Kong Exchanges and Clearing (0388.HK) (HKEx), announced a long list of measures that include moves to address low inventory levels and boost liquidity in electronic trading.

The 146-year-old LME plans to work with China’s Qianhai Mercantile Exchange (QME), also owned by HKEx, to launch trading in lower nickel grades – such as nickel matte – that make up a growing portion of global output.

A disconnect between the LME high-grade nickel and surging production of low-grade nickel was a key driver of the chaotic price action on March 8, 2022, which forced the LME to annul nickel trades and suspend trading for the first time since 1988.

The exchange plans to make permanent the daily price limits imposed on all metals after last year’s nickel swings, though it will tighten the caps on main metals copper and aluminium to 12% from 15%.

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