Jakarta, CNBC Indonesia – The London Metal Exchange, the metal commodity trading exchange in London, England, today, Tuesday (08/03/2022), suspended nickel trading after an unprecedented price spike, quoted from Bloomberg, Tuesday (08/03/2022) .
The price of nickel in trading on Tuesday (08/03/2022) during the day Indonesia has jumped 250% in two consecutive days reaching above US $ 100,000 per ton.
This spike in nickel prices leaves brokers struggling to pay margin call to an unfavorable position.
The move comes as investors and industries that have sold the metal scramble to buy back contracts after prices initially rallied on concerns about limited supply of nickel from Russia.
These conditions will evoke memories of the LME’s darkest period, namely the “Tin Crisis” in 1985, which caused the exchange to suspend tin trading for four years and pushed many brokers out of the market.
That was prompted by the collapse of the International Tin Council, a body backed by 22 governments that collapsed when it could no longer prop up tin prices.
“This is the second after the tin crisis,” said Malcolm Freeman, a broker at Kingdom Futures who started his career at LME in 1974, quoted from Bloomberg, Tuesday (08/03/2022).
“This is the right thing to do, and my hunch is that they will likely cancel today’s trading as well.”
(wia)
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