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Nickel volumes rose as prices traded within daily limits on the London Metal Exchange for the first time since last week’s reopening, a sign that the market is starting to stabilise after an unprecedented squeeze drove prices higher.
Tuesday’s flurry of deals came as LME prices came back in line with nickel contracts traded on the Shanghai Futures Exchange, which remained open during a week-long suspension of trading in London in the wake of the short squeeze. More than 11,300 contracts, or 67,800 tonnes of nickel, were traded at 2:20 p.m., as LME prices pared sharp early losses at the start of the evening session on the rival Chinese exchange.
Nickel trading has been largely frozen since the market reopened on March 16, as the exchange’s daily limits prevented futures from falling to a level where buyers were willing to intervene.
LME nickel was trading 6 percent lower at $29,510 a tonne at 2:20 p.m., rebounding from a loss of as much as 15 percent. SHFE prices were up 1.6% at 210,040 yuan a tonne, which is equivalent to about $29,200 a tonne once currency conversions and VAT deductions are taken into account.
At the close of trading on the LME, nickel was down 10% to settle at $28,159 a tonne.
Matthew Chamberlain, Chief Executive of the LME said, “Now it makes sense that with the situation surrounding that squeeze having been resolved, we will return to a more normalised level, and obviously the Shanghai price is a good guide.”