London Daily

Focus on the big picture.
Tuesday, Oct 21, 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
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
×