LME launches reporting of OTC positions after nickel chaos
Published by
ScrapPrices
Published on June 17,2022 12:00 PM Metals
The London Metal Exchange (LME) approved rules on Friday for members to report all over the counter (OTC) positions, a move taken after off-exchange trading was partly blamed for a wild spike in nickel prices in March.
LME launches reporting of OTC positions after nickel chaos

LONDON, June 17 (Reuters) - The London Metal Exchange (LME) approved rules on Friday for members to report all over the counter (OTC) positions, a move taken after off-exchange trading was partly blamed for a wild spike in nickel prices in March.

"This ... will improve the ability of the LME to oversee activity holistically through increased visibility, ensuring future market stability," the exchange said in a statement.

The exchange, owned by Hong Kong Exchanges and Clearing Ltd (0388.HK), was forced to suspend nickel trading and cancel all deals on March 8 because of disorderly activity caused partly by a large OTC short nickel position.

The new rules, due to take effect in one month, require OTC positions reported on a weekly basis in all physically-delivered metals including aluminium, copper and nickel.

The LME has withdrawn an existing requirement for members to report daily their OTC nickel positions.

The LME, the world's oldest and largest market for industrial metals, will also require holders of large OTC positions to tell the exchange the rationale for holding them.

The LME received 27 submissions during its two-week consultation period, with a majority opposed to introducing the OTC rules before probes were completed into what caused chaotic nickel trading in March.

Benchmark nickel on the LME doubled to a record above $100,000 a tonne on March 8 on expectations China's Tsingshan Holding Group and others would have to buy back their short positions, which bets on prices falling.

British financial regulators in April launched a sweeping probe into how the LME suspended nickel trading and the LME also commissioned its own independent review.

"While any relevant findings from the independent review will also be considered and factored into the LME’s plans in due course, the LME will not delay taking appropriate actions," it said.

U.S. hedge fund Elliott Associates and Jane Street Global Trading are suing the LME for $456 million and $15.3 million respectively for cancelled nickel trades.

MORE METALS NEWS
July 01,2022 08:00 AM
Copper prices slumped on Friday to their weakest in 17 months as inflation data reinforced fears that central bank tightening would push economies into a recession and hit metals demand.
June 30,2022 08:00 AM
Copper prices fell on Thursday to log their biggest quarterly slump since 2011 as COVID lockdowns in China and slowing economic growth curtailed demand.
June 29,2022 09:00 AM
South Korean battery maker LG Energy Solutions (LGES) (373220.KS) said on Wednesday it had entered into a non-binding deal for battery-grade lithium supply with Compass Minerals (CMP.N) while negotiations for a final agreement were ongoing.