Industrial users flee LME nickel, deepening market fissures
LONDON, Sept 14 (Reuters) – The London Metal Exchange faces a struggle to regain its dominant position in global nickel trading as volumes slide and participants flee an increasingly volatile market in the wake of trade mayhem earlier this year.
Nickel volumes on the world’s oldest and largest venue for trading metals collapsed after the LME suspended its contract for a week and cancelled all trades on March 8, when prices doubled in a few hours to a record above $100,000 a tonne.
LME data shows many participants have abandoned the nickel market, a trend several traders say looks set to continue leading to even lower volumes and more volatility as more people opt to negotiate prices directly.
Average daily volumes of nickel traded on the LME plunged 50% last month to 203,856 tonnes from the same period last year. This follows drops of 28%, 35%, 25% and 42% in April, May, June and July respectively.