LME Examines Volatile Trading as Nickel Fall

Nickel falls as much as 12% to $26,610 per ton and closes at $27,532 on Wednesday, as the London Metal Exchange (LME) boosts its surveillance for nickel trading after noticing the extreme volatility in the market that resembles the March debacle.

In addition, LME also amplified its monitoring of the traders to prevent any improper conduct during the activity.

“The LME notes the current volatility in nickel,” LME noted before adding, “The price limits in place are functioning as expected, and the LME is undertaking enhanced monitoring to ensure that participants’ trading activities are being conducted appropriately.”

Since the March debacle, when prices soared 250% in just two days, the LME implemented a 15% upper and lower limit for daily price swings.

Head of the commodity strategy at Saxo Bank A/S, Ole Hansen, commented, “The diabolical behavior we saw in the market earlier this year has obviously scared a lot of people off.”

“It’s become a disorderly market. It’s not a market many people want to touch and so it becomes very easy to push it in either direction.” Hansen added.

Another factor that affected nickel prices was the news about the output cut in the New Caledonian nickel producer Prony Resources due to a leak in the mine’s tailing dam.

The fall came following the six consecutive days surge of nickel from Nov 8 to Nov 13 and the breaching of the 15% upper price daily limit on Monday.

Indonesia Proposes Establishment of Nickel Producers Bloc

In the talks with Canada, Indonesia reportedly proposes the establishment of the world’s top nickel producers’ bloc akin to the oil Cartel OPEC.

Indonesia’s investment minister, Bahlil Lahadalia, stated, “Through such collaboration, we hope all nickel-producing countries will be able to profit through a fair added value creation.”

Lahadalia proposed this idea to Canada’s trade minister Mary Ng when the two met during the G20 summit in Bali.

According to Lahadalia, an organization like OPEC is needed to streamline and organize the policies regarding nickel, which was a key mineral in creating batteries.