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LME halts nickel trading after price spikes above $100K/ton

Mar. 08, 2022 7:05 AM ETNickel Futures (LN1:COM)NILSYBy: Carl Surran, SA News Editor29 Comments

Nickel is a chemical element, pure industrial use or in metal alloys, corrosion resistant, stainless steel

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The London Metal Exchange said it suspended trading in its nickel market "following further unprecedented overnight increases in the three-month nickel price," and likely will not reopen the market before March 11.

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Comments (29)

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They shut down trading until at least March 11, 2022 and cancelled trades above $50k? What kind of command and control market is this?
autofocus111 profile picture
@BSBA Econ Mr. Big Shot aka Xiang Guangda's company Tsingshan Holding Group Co faces a margin call on a multi-billion dollar short position. If his company goes down for the count, all hell will break loose in the nickel and stainless steel markets. So of course the LME is willing to accomodate him, market makers and brokers be damned.
@autofocus111 why would anyone who is not a producer be short nickel? or any commodity for that matter? i can understand not owning a commodity but being short as a pure speculation? during clear inflationary times? why bother? there are many really easy ways to make money.
autofocus111 profile picture
@mp2 My understanding: The company is a huge producer of nickel but mainly in the form of nickel pig iron. Unlike a company that sells its produced nickel though, where selling forward contracts makes perfect sense, it uses the NPI as input to its main product which is stainless steel ie. it is vertically integrated. So the question becomes why would this company go short the metal input instead of selling forward contracts of its final product SS? I assume it's doing that to somehow maximize profits. But in effect it is a naked short, as it does not actually sell the nickel-containing NPI or nickel (or at least if it does it's only excess metal they don't ahve capacity to process into SS). In any case, Big Shot is trapped, and LME is working with this major customer to devise an exit. Meanwhile, those who bought contracts are stuck with LME offline, and likely are being forced to negotiate with Big Shot and reach a settlement. In an open and fair market, Big Shot should face the full consequences of his erroneous trades.
So they used to make stainless steel with nickel?
autofocus111 profile picture
Paper metal trading system broken. Is paper gold next? Physical or bust.

>>>A bipartisan group of U.S. senators has introduced a bill to impose secondary sanctions to anyone buying or selling Russian gold in an effort to block one of Moscow’s remaining possible avenues for offsetting the collapse of its currency. Angus King of Maine -- along with Republicans John Cornyn of Texas and Bill Hagerty of Tennessee and New Hampshire Democrat Maggie Hassan -- launched the legislation to stop anyone transacting with or transporting gold from Russia’s central bank holdings or selling gold physically or electronically in Russia. Russia’s gold stockpile was valued at $132.3 billion as of the end January....The move may deter banks in countries such as China and India from buying or lending against Russia’s sovereign gold stockpile, which is the fifth-biggest in the world. Western lenders are already barred from transacting with the central bank, effectively cutting its gold out of the biggest markets in New York and London.


"A bipartisan group of U.S. senators has introduced a bill to impose secondary sanctions to anyone buying or selling Russian gold"

LOL! Gold is a commodity. Many would buy it at a slightly discounted price. Some would then melt it, and make it into different bars to resell on the world market. Some countries would take the Russian gold in barter.
autofocus111 profile picture
@6228371 How long until they 'ban' Pd I wonder. The stupidity being exhibited by these US politicians is surreal.
@6228371 reuters “a bi-partisan group of congressmen today considered a bill where only congress and staff and peoples of the lowest quartile of intelligence would be free to trade nilsy shares.”
check out for Sherritt International.
autofocus111 profile picture
@michi1711 Poor Sherritt. Ni could go to $1M/ton and the stock would be lucky to hit a Loonie. Maybe US officials will head to Cuba after their meetings with the Venezuelan government.
The nickel price is up greatly today. What are Norilsk Nickel shares really worth? Could they be worth $40+?

@6228371 Yes- $40+. Maybe more. But only if they aren't confiscated. If you are located in the US, UK, EU, CA, etc. there is an excellent chance that your broker, your broker's bank, or your gov regulator forces you out. And at that point your broker will be selling in the pennies without your permission. But yeah- it's super undervalued!
autofocus111 profile picture
@ACG88 Neither NILSY or its two controlling oligarchs has been sanctioned.

"Neither NILSY or its two controlling oligarchs has been sanctioned."

So you think it is possible for NILSY to start trading again when the stock resumes trading in Russia? The Russian stock market might resume trading tomorrow.
stag15 profile picture
Who could have seen this coming, lol.

"Who could have seen this coming, lol."

Not the way it happened, with restrictive closing trades only. One would have thought either a stock is halted or it isn't. Not that those with margin calls who were forced to sell would be forced to sell for almost nothing. That was unfair.
@6228371 dont worry. congress & staff were probably exempt and free to buy distressed shares.

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