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LME Benchmark Nickel Soars 15% to Hit Upper Limit

The price surge follows a record price spike last week, a six-day trading suspension, and then a restart hit by technical glitches


nickel price spike
Nickel sheets stacked at Kola Mining and Metallurgical Company, near Murmansk, Russia. Photo: Reuters

 

The London Metal Exchange’s (LME) benchmark nickel surged 15% on Wednesday to hit its upper trading limit, reversing direction and climbing for the first time since trading resumed last week.

LME nickel gained 5.5% at the open and hovered at stronger levels for the first few hours of trade, but spiked by nearly $3,000 in the span of about 20 minutes.

It hit its upper limit of $32,380 a tonne and was up 14.3% at $32,195 by 1055 GMT, having traded 2,674 lots.

A trader said it was unclear what was behind the sudden jump, but that it might be due to computer-driven automated trading systems.

“In any case, the underlying market is tight, then if you take Russian uncertainty into account, it looks cheap to me,” he said.

 

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LME benchmark nickel slumped for several days in very low volumes and repeatedly hit its lower trading limits after trade was restarted after a break to calm the market.

During that period, traders said LME nickel was moving lower towards levels seen on the Shanghai Futures Exchange. On Wednesday, June futures in Shanghai closed the afternoon session up 3% at 205,300 yuan, or about $32,222.

LME volumes have picked up since Tuesday, suggesting the market is starting to return to normal after two weeks of chaos.

The world’s top nickel trading venue endured a record price surge, a six-day trading suspension, and then a restart hit by technical glitches.

The LME, owned by Hong Kong Exchanges and Clearing Ltd, suspended nickel trading on March 8 after prices spiked by more than 50% to over $100,000 a tonne.

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

LME Nickel Trading Halted Again After Deal Limit Error

Nickel Price Surge Batters Chinese Stocks

Nickel’s $100k Spike on Short Squeeze Prompts Trading Halt

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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