A unit of China Construction Bank Corp. was given additional time by the Landon Metal Exchange to pay hundreds of million of dollar of margin calls its missed on Monday amid unexpected rise in nickel price, according to Bloomberg citing their sources.
According to the sources, it is not formally a default.
Bloomberg reported, “to be clear, the non-payment isn’t necessarily an indicator of any problems at the parent company, which is one of China’s largest banks. It’s more likely due to a failure by one of its metals-industry clients to make margin payments to CCBI Global Markets, which is a broker on the LME’s open-outcry trading floor, one of the people said.
Nickel jumped as much as 90% on Monday, in one of the most dramatic one-day moves ever in commodity markets, touching a record high of $55,000 a ton.
Prices have been soaring for weeks as traders priced in disruption to supply from Russia, which is one of the largest exporters of nickel.
Prices have been rallying for weeks, as traders worry about the possibility of disruption to supplies from Russia, the largest exporter of refined nickel.
