The price of nickel on the London Metal Exchange drops by 15%, reaching a new low.
- According to Refinitiv data, the price of the metal opened at $31,380 per metric ton on the London Metal Exchange.
- Nickel trading on the 145-year-old exchange has been volatile in recent weeks, with price fluctuations, technical issues, and trading suspensions.
On Monday, the three-month nickel contract plummeted by 15%, reaching a new trading record.
According to Refinitiv data, the price of the metal opened at $31,380 per metric ton on the London Metal Exchange.
Nickel trading on the 145-year-old exchange has been volatile in recent weeks, with price fluctuations, technical issues, and trading suspensions.
Earlier this month, commodity prices increased due to supply concerns resulting from Russia's invasion of Ukraine. The imposition of Western sanctions added to the disruption fears. Russia is a significant producer and exporter of metals and grains, and is the world's third-largest producer of nickel, a crucial component in stainless steel and lithium-ion batteries.
Nickel prices surged more than double in a short period on March 8, reaching over $100,000 per metric ton, as China's Tsingshan Holding Group purchased large quantities to offset its short positions on the metal.
The LME halted trading on nickel after a systems error allowed a few trades to go through below a new daily price limit, resulting in a significant price rally.
The LME set a trading range of 8% for Thursday and 12% for Friday. However, when trading started, the price immediately hit its lower limit. Reuters reported on Friday that volumes were low and few buyers were willing to pay the LME price, which was higher than that on the Shanghai Futures Exchange.
Matthew Chamberlain, CEO of the LME, stated on Wednesday during an interview with CNBC's "Squawk Box Europe" that the exchange is fully aware of the impact of the incident and is taking steps to prevent it from happening again.
Chamberlain stated that the LME had intentionally focused on stability by establishing a limited range of daily trading limits. However, if the exchange perceived a more organized market, these limits could potentially be broadened.
—CNBC’s Sam Meredith contributed to this article.
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