The London Metal Exchange says the nickel market will remain closed until March 11 after trading was suspended yesterday (March 8) following a surge in prices.
The exchange, based in London, England, stressed that it was not announcing a firm date “given the uncertainties in the broader market,” and laid out a series of steps it’s planning to ensure order in the market once nickel trading resumes.
Specifically, the London Metal Exchange says it will reopen nickel trading in European hours only to begin with, set a daily 10% limit on price moves, and is exploring whether it can voluntarily reduce the number of outstanding short positions prior to reopening to ease the upward pressure on prices.
The London Metal Exchange canceled trades that took place after midnight on Monday this week (March 7), when prices rose from $50,000 U.S. a ton to more than $100,000 U.S., as brokers and short-position holders faced spiraling losses.
A Chinese tycoon who built a large short position in the market is facing billions of dollars in mark-to-market losses because of the surge in prices. A unit of China Construction Bank was given additional time by the exchange to pay hundreds of millions of dollars of margin calls.
In its update, the London Metal Exchange said that all of its clearing members had met their margin requirements in full.