The London Metal Exchange has halted electronic trading of nickel minutes after trading resumed citing technical issues with its new daily limit, after prices plunged when the market opened after a week long suspension.
After trading briefly resumed, futures prices fell through the 5% daily window before the market was suspended again. The exchange said it halted electronic trading to investigate the problem and will cancel a “small number” of transactions. Phone-based trading remains open and brokers in the open-outcry floor known as “the Ring” will also trade nickel later today.
The sharp drop in prices underlines last week’s historic short squeeze is easing. It narrows the gap between nickel contracts on the LME and those on Shanghai Futures Exchange, which have continued trading during the suspension.
Last week on Tuesday, major decision was made to halt trading after spiraling prices left some brokers to end up to pay huge margin calls against bearish positions held by top producer Tsingshan Group Holding Co.
Most analyst and traders in a Bloomberg survey on Tuesday had predicted that prices would drop by the new exchange limit when the market reopened.
