London Daily

Focus on the big picture.
Monday, Jun 29, 2026

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
UK Launches New Measures to Improve Safety Standards in Night-Time Venues
UK Tightens Import Rules for Low-Value Parcels to Support Domestic Retailers
UK Launches £85 Million Obesity Care Programme Targeting Early Intervention Projects
UK Commits Up to $26 Million to Ebola Response in Democratic Republic of Congo
Security Industry Authority Flags Safety Failures in Night-Time Economy Inspections
Cambridge South Railway Station Opens After £250 Million Investment
UK Moves to Close Import Duty Loophole for Small Parcels by 2028
UK Invests £85 Million in Projects to Transform Obesity Care
Berkeley Group Warns London Housebuilding Falling Far Short of Demand
UK Council Tax Arrears Rise to £9.3 Billion Amid Ongoing Household Financial Strain
Markets Watch Political Transition as Andy Burnham Emerges as Labour Leadership Frontrunner
Extreme Heat Raises Long-Term Risks for UK Inflation and Productivity, Analysts Warn
UK Health Alerts Extended as Record June Heatwave Grips England
UK Parliament Faces High-Stakes Week of Spending, Security and Industrial Legislation
UK Repeals Vagrancy Act Ending Criminalisation of Rough Sleeping in England and Wales
GB News Pundit Charged With Fraud Over Alleged Conduct as Former Labour Adviser
Reform UK Gains Parliamentary Visibility in First Senedd Opposition Appearance
Metropolitan Police Arrest Man on Suspicion of Attempted Murder After London Car Incident
Ocado Chief Executive Tim Steiner Faces Scrutiny Over £100 Million Remuneration Package
British Chambers of Commerce Downgrades UK Growth Outlook to 0.9 Percent for 2026
Nottingham University Hospitals Maternity Failings Trigger Renewed Calls for Public Inquiry
Severe Heatwave Disrupts UK Transport Networks and Strains Public Services Across England
Labour Leadership Transition Raises Prospect of Andy Burnham Becoming UK Prime Minister
UK Government Confirms Further Medicine Price Concessions for Community Pharmacies in June
British Chambers of Commerce Calls for Public Procurement Reform to Boost Regional Growth
Thousands Mark Armed Forces Day Across the United Kingdom With National Parades and Flypasts
Man Arrested in Ealing on Suspicion of Attempted Murder After Vehicle Ramming Incident Injures Five
Cambridge South Station Opens With £250 Million Investment to Strengthen Life Sciences Corridor
UK Heat-Health Alerts Extended Across England as High Temperatures Persist
Thames Water and Energy Operators Warn of Peak Demand Risks During UK Heatwave
Government Conference Highlights Push for Evidence-Led Policy Across UK Public Sector
Insolvency Service Reports Improved Confidence in UK Insolvency System
Security Industry Authority Finds Widespread Safety Failures in UK Night-Time Economy
Nigel Farage Expands Anti-WHO Campaign Into United States With New Lobbying Structure
Home Secretary Seema Mahmood Unveils New Safe Routes Plan for Asylum Seekers
UK Government Warns of Peak Electricity and Water Pressure Amid Ongoing Heatwave
New Nuclear Plant in Wales Named Gwyndod Power Station as Energy Strategy Advances
UK Announces First Major Hydropower Projects in Four Decades to Expand Renewable Capacity
Thirteen Men Charged in Major UK Sexual Abuse Case as Investigation Continues
UK Launches Cross-Sector Climate Security Taskforce Linking Environment and National Security
UN Secretary-General António Guterres Calls for Urgent Global Methane Emissions Cuts in London
World Bank Approves $1 Billion UK-Backed Financing Package for Ukraine Recovery
UK Pledges Emergency Aid and Rescue Team Deployment to Earthquake-Hit Venezuela
Bank of England Holds Interest Rates at 3.75 Percent for Fourth Straight Meeting
Record-Breaking Heatwave Puts Strain on UK Health Services and Energy Networks
London Ambulance Service Sees Record Emergency Demand as Heatwave Intensifies
British Chambers of Commerce Warns of Prolonged Weak Investment Climate Through 2027
Bank of England Holds Interest Rates as Inflation Risks Persist
UK Construction Sector Faces One Percent Contraction Amid Cost and Investment Pressures
Former DUP Leader Sir Jeffrey Donaldson Convicted of Sexual Offences
×