Nickel trading on the London Metal Exchange (LME) was suspended for more than a week after the metal briefly soared to $100,000 a tonne. Nickel, which is used to make stainless steel and electric-vehicle batteries, has recently traded for between $10,000 and $20,000 a tonne, but on 7-8 March, the price rose by 250%, prompting the LME to halt trading until 16 March.
When prices leapt by $30,000 in a matter of minutes early on 8 March, the LME halted trading. Controversially, it also cancelled the near-$4bn of nickel trades that were made in the hours preceding the surge, effectively resetting the market to the previous day’s $48,078 closing level. That drew fury from some traders, says the Financial Times. By “scrubbing the day from the record books”, they say the exchange has taken the side of squeezed short-sellers and brokers over those who bet the right way.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Yet for all the drama, nickel looks likely to come back down to earth soon, says David Fickling on Bloomberg. High prices will give smelters in China an incentive to convert lower-quality nickel into the more premium variety traded on the LME. And new plants in Indonesia that tap abundant, but low-grade, laterite ores suggest that we may be on the verge of unlocking “a significant new source” of global supply. “Prices driven by a short squeeze of this sort tend to calm down rapidly.”
-
Santander reveals failed home sales are costing the UK economy £1.5 billion - how to fix the housing marketA lack of certainty in the homebuying process is frustrating for buyers and sellers but is also bad for the economy
-
Inflation holds steady at 3.8% ahead of BoE meetingThe rate of inflation did not rise in August, but the Bank of England is still expected to keep interest rates on hold tomorrow
-
Small UK industrial stocks are hidden gemsOpinion Ed Wielechowski of the Odyssean Investment Trust highlights three of his favourite British small-cap industrial stocks
-
Aurora Innovation is running on empty – is it overvalued?Aurora Innovation, a maker of self-driving trucks, may have promised far more than it can deliver
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeekInterview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in creditCorporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
'The City's big bet on green finance fails to pay out'Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
