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Traders, brokers and clerks on the trading floor of the open protest pit at the London Metal Exchange Ltd. in London, UK, on ​​Monday, February 28, 2022.

Chris J. Ratcliffe | Bloomberg | Getty Images

LONDON — The benchmark three-month nickel contract fell 8% on Thursday morning to hit the new trading limit as heavy selling in the metals markets continued.

According to data from Refinitiv, the price reached $41,945 per metric ton when it opened for trading. The nickel price more than doubled in a few hours on March 8, climbing above $100,000 a tonne when one of the world’s top producers, China’s Tsingshan Holding Group, bought large quantities to reduce its short bets on the metal.

Trading had to be halted as the move exacerbated a price rally at a time when metals were already skyrocketing amid the escalating Russian conflict in Ukraine.

On Wednesday, the LME attempted to resume nickel trading after the rare shutdown. But a technical glitch caused the 145-year-old exchange to temporarily halt the market again before reopening trading at 2 p.m. London time.

The LME set a trading limit of 5% on Wednesday, which was raised to 8% for Thursday. Wednesday’s “system failure” allowed a small number of trades to proceed below the newly imposed daily price cap.

Speaking before the opening Wednesday, Matthew Chamberlain, CEO of the LME, told CNBC’s “Squawk Box Europe” that the exchange was “absolutely aware of the impact this has had on so many people and we need to make sure it doesn’t” . don’t happen again.”

Chamberlain said the LME has “deliberately prioritized stability” by instituting a relatively narrow range of daily trading limits, but these could be eased quickly if the exchange perceives a “more orderly market”.

Commodity prices have risen amid supply fears linked to the Russian attack on Ukraine, with the ongoing war and a series of Western sanctions fueling fears of disruptions.

This post Nickel drops 8% to reach limit in chaotic trading on London metal exchange

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