Market Insight April 2022

Swipe to the left
April 4, 2022 No comments

Nickel Goes For Turbulent Ride On LME - A little over a year ago, GameStop was at the center of the meme stock craze, where retail investors upended the Wall Street order. Over the three two weeks, it was the LME’s time to get shaken up.

Nickel prices skyrocketed more than 250% over the course of two days. The LME responded by canceling billions in trades, pushing the price back down. Finally, software glitches prevented trading on the exchange. It is a mess, one that not only the speculators and traders have to contend with.

The Nickel Institute, which represents those companies who use the vital metal for manufacturing, was pleased that partial reopening of trading had resumed, but has questions how the LME will repair the damage done. 

“A well-functioning LME is a critical part of enabling nickel’s efficient use, globally,” said Dr. Hudson Bates, president of the institute. “Producers and users alike depend on an efficient, transparent, equitable and effective LME. Following the recent disruption to nickel trading, the Nickel Institute is highly concerned about the negative impacts throughout the nickel value chain and on downstream users. There is still a lack of information regarding the outlook for resumption of normal trading on a regular and consistent basis. The current situation is causing major reputational damage for both the nickel industry and the LME with the potential for a loss of confidence and demand destruction for nickel growing by the day.” 

The Nickel Institute hopes the incident results in a stronger, more transparent system with a reliable set of safeguards to protect the market and its participants.

Source: MCN, 03.22.2022

To continue reading more articles this month, check out our full Market Insight.