On Tuesday, local time, the London Metal Exchange (LME) issued the latest announcement, revealing the latest progress on nickel futures trading.
Starting at 08:15 local time on Tuesday, LME announced the suspension of unusually volatile nickel futures trading, the cancellation of all over-the-counter nickel trading with the LME select trading system since 0 o'clock that day, and delayed delivery of spot nickel contracts due to be delivered on March 9.
LME said in the announcement that at present all members of the clearinghouse fully meet their own margin requirements. However, LME is also aware that the credit environment in the overall commodity market is tense in the wake of geo-events and skyrocketing prices. As a result, the exchange is not expected to resume trading in nickel futures before March 11 and will inform the market by 2pm London time at the latest.
It should be noted that March 16 is also the third Wednesday of the month, which is also the day when the exchange traditionally has the most expired contracts of the month.
In terms of the details of resuming trading, LME's current plan is that after nickel futures resume trading, the trading time will be shortened to 9am London time until the exchange is confident that it will resume to 1am. LME is expected to restart trading at its closing price on March 7 and set a 10 per cent daily limit for nickel futures, meaning it could take more than a day to restore stable price volatility. Trading will continue after the price limit is triggered, but orders outside the limit range will be automatically rejected.
At the end of the announcement, LME also mentioned the possibility of sterilizing long and short positions before resuming trading to enhance market stability and reduce market price movements after the resumption of trading. On a voluntary basis, the exchange will first identify traders who hold a large number of (tentatively more than 100) multiple and short orders who are willing to withdraw from their positions and the prices at which they are willing to close their positions, and then write off some of the agreed positions.
