LME Will Lengni Daily Up Or Down To 8% May Be Further Adjusted

In a statement on Wednesday, the London Metal Exchange (LME) said it would raise the upper or lower limit for nickel to 8 percent and maintain a 15 percent daily price limit for other base metals, effective Thursday.

Lenni resumed trading after a week-long suspension, but things did not go as planned. Wednesday lune nickel open limit, and due to the exchange technical reasons, hit the lower limit led to stop again. Electronic trading in nickel, which had been suspended, resumed at 2 p.m. London time Wednesday (22:00 p.m. Beijing time Wednesday), with gains and losses limited to 5 percent.

The LME will not release Wednesday's closing price, as nickel prices are down by the daily limit during the closing period. The $45,590 / tonne limit will continue to be used for margin calculations at the LME clearing house, as well as the basis for Thursday's gains and losses.

The sharp market turmoil forced the LME to increase or decrease nickel trading to 8 per cent a day, but it added that it could further adjust the upper or lower limits for nickel and other metals depending on market conditions.

In a sign that tensions may be easing, Aoyama announced on Tuesday that it had reached a silent agreement with a syndicate of futures bank creditors. According to the agreement, during the quiet period, Aoshan and its syndicate will actively negotiate the implementation of standby, secured liquidity facilities, mainly for Aoshan's nickel position margin and settlement needs. During the quiet period, the participating futures banks agree not to liquidate the positions held by Aoshan or require additional margin for existing positions.

"In a sense it was expected because we all expected nickel prices to fall, it was just a matter of how fast," said Colin Hamilton, managing director of commodity research at BMO Capital Markets.

The LME's SELECT electronic trading showed a huge volume of sell orders, equivalent to about 50,000 tonnes of nickel, at a limit of $45,590 a tonne, suggesting further falls once trading opens.