London Daily

Focus on the big picture.
Friday, Sep 12, 2025

UK regulators probe LME's halt to chaotic nickel trading

UK regulators probe LME's halt to chaotic nickel trading

British financial regulators launched a sweeping probe on Monday into how the London Metal Exchange (LME) suspended chaotic nickel trading last month, a move that prompted angry protests from market participants and damaged the exchange's reputation.

The intervention from the Financial Conduct Authority (FCA) and the Bank of England (BoE) was unusually broad and hard-hitting, aimed at ensuring London is seen as a well-run financial centre as it faces rising competition, industry sources said.

The LME, the world's oldest and largest market for industrial metals, suspended nickel trading on March 8 after prices spiked by more than 50% in a matter of hours to hit $100,000 a tonne.

When trading resumed on March 16, the LME had technical glitches for several days after imposing price limits, leaving traders fuming.

The new probes highlight a wave of criticism of the LME both from those who wanted the market to remain open and others faulting the LME for delaying action.

Malcolm Freeman, chief executive of broker Kingdom Futures, said there were several warning signals but the LME had no choice but to suspend trading.

"You could have seen every single storm cloud brewing on the Friday (ahead of the Tuesday closure)," he said.

"But if it had been left going, you would have had billions of pounds of debt, LME brokers blown out of the water and the exchange technically insolvent."

Regulators said the episode underlined questions about the transparency of the 145-year-old LME and they would determine if further action should be taken.

Several investigations will be held. The FCA will look at how the exchange handled the situation, the LME will commission its own independent probe, while the BoE will look into the LME's clearing house.

PRICE LIMITS


The LME welcomed the probes and said its own review hoped to identify actions to minimise the risk of a disorderly market in future. It noted it had introduced 15% upper and lower daily price limits for all its physically delivered metals when it restarted nickel trading.

Stable financial markets are important for Britain, which is hoping the EU will allow clearing houses like LME Clear to continue serving customers in the bloc after June 2025.

Britain's departure from the EU has largely severed the country's financial services ties with the bloc.

The FCA and the Prudential Regulation Authority will examine firms that held significant positions to assess their risk management and governance.

The surge in prices that triggered the halt was blamed on short-covering by one of the world's top producers, China's Tsingshan Holding Group.

Tsingshan has acknowledged it had a position and announced a standstill agreement with banks. The LME has not named Tsingshan and keeps confidential its members' positions.

The LME, owned by Hong Kong Exchanges and Clearing Ltd (0388.HK), has said large short positions in nickel originated primarily from the over-the-counter (OTC) market organised by banks and brokers.

Other participants during the nickel crisis had long positions and stood to benefit from the spike in prices.

"It's not an easy situation to resolve,” said Tom Price, head of commodities strategy at Liberum.

"We've got what seems to be a guy with a massive short position, and a situation where we may never know if he was protected by the LME or that the LME was simply protecting its platform and its wider community of traders," Price said.

"Those who lost the opportunity of making money on this short-covering activity are still furious and expect a real outcome from the investigation."

Newsletter

Related Articles

0:00
0:00
Close
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
×