LME benchmark nickel spikes 15% to hit limit up -Breaking
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Eric Onstad
LONDON, (Reuters) – The benchmark nickel of the London Metal Exchange (LME), surged 15% Wednesday as it reached its upper trading limit. This was a reversal and a climb for the first time in trading since last week.
LME Nickel gained 5.5% during the opening and hovered around stronger levels the first couple of hours. However, it spiked nearly $3,000 within a span of just 20 minutes.
The price reached $32,380/tonne, and it was up 14.3% to $32,195 at 1055 GMT. After having traded 2,674 lots.
The trader stated that although it wasn’t clear what caused the jump in price, it could be explained by computer-driven automated trading platforms.
He said, “In every case, there is a tight underlying market, and then, if you consider Russian uncertainty, it looks cheap.”
LME benchmark nickel fell for several days with very low volumes. After a short break, trade resumed and it repeatedly met its lower trading limits.
LME Nickel was reported to have fallen towards the Shanghai Futures Exchange levels during that time period by traders. The Shanghai June Futures Exchange closed Wednesday’s afternoon session at 205.300 Yuan or approximately $32,222.
LME volumes are up on Tuesday suggesting that the market has begun to recover from two weeks of turmoil. This world-famous nickel trading site was hit hard by a record-breaking price spike, a 6-day suspension of trading and then an unexpected restart due to technical issues.
After nickel prices rose by over 50%, the LME was shut down by Hong Kong Exchanges and Clearing Ltd on March 8.
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