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The world's largest and oldest metals market annulled all nickel trades in March last year after chaotic price action and suspended trading for the first time since 1988. "That the FCA has decided to investigate means it considers there are circumstances suggesting that LME may have committed serious misconduct. ACTIVE STEPSThe 146-year-old LME said it had taken active steps to enhance nickel market liquidity and transparency, including 15% daily price limits and over the counter (OTC) position reporting for all physically delivered metals. The FCA and Bank of England began a review last April into the trading halt by the LME, owned by Hong Kong Exchanges and Clearing (0388.HK). In January management consultants Oliver Wyman released an independent review of the nickel trading debacle and the exchange said it would set out an implementation plan for the report's recommendations by the end of March.

☆ Exclusive: CME to launch nickel contract using prices from new platform -sources
▼ + stars: | 2023-02-22 | by ( Pratima Desai | ) www.reuters.com time to read: +3 min

CME want a nickel contract, they are planning to base it on traded prices on GCH's physical platform," one of the sources with direct knowledge of the matter said. In response to a request for comment, CME said: "We cannot comment on whether we are developing any particular product." Nickel industry sources said illiquidity meant LME nickel prices often did not represent the fundamentals of the market. "There aren't really any alternatives to the LME contract at the moment and the market needs a liquid contract. Using ShFE's nickel contract is difficult for non-Chinese firms as they need to be affiliated with a local entity and because it is priced in yuan.

☆ Gold prices seen rising towards record highs as rate rises near end
▼ + stars: | 2023-01-16 | by ( Peter Hobson | ) www.reuters.com time to read: +3 min

Fast-rising interest rates hammered gold prices last year, kicking them as low as $1,613.60 in September from a high of $2,069.89 in March - just shy of a record peak in 2020. ,Charting gold prices, the U.S. dollar index and U.S. inflation-adjusted 10-year bond yields. The weakening U.S. currency and bond yields "will become macro tailwinds for the yellow metal, pushing gold above $2,000/oz in the coming months," said analysts at Bank of America. Speculators who in November were betting gold prices would fall have amassed a net long position in COMEX futures of 8.3 million ounces of gold, worth $16 billion, helping push up prices. Charting gold prices and technical indicatorsReporting by Peter Hobson; Editing by Pratima Desai and Emelia Sithole-MatariseOur Standards: The Thomson Reuters Trust Principles.

☆ Exclusive: UK watchdog blocks LME plan to restart Asian hours nickel trade-sources
▼ + stars: | 2023-01-11 | by ( Pratima Desai | ) www.reuters.com time to read: +2 min

The world's largest metals trading exchange was forced to suspend all nickel activity for eight days in March 2022, after prices spiked more than 50% during Asian trading hours to hit a record above $100,000 a tonne. Volumes and liquidity on the LME have collapsed since then, partly due to the continued suspension of nickel trade in the Asian time zone. The LME had said on Nov. 28 that it hoped to resume trading during Asian hours within two weeks. "The regulator wants the LME to monitor nickel trading and make sure volatility is contained. "The regulator needs to be sure that if Asian hours nickel trade was to resume, supervision is effective.

LONDON, Jan 10 (Reuters) - The London Metal Exchange (LME) said on Tuesday it will set out by the end of the first quarter how it will deliver on the recommendations of an independent report into the nickel crisis last year. Months after turbulence highlighted shortcomings in LME oversight, the nickel contract remains broken. It appointed management consultants Oliver Wyman to carry out a review of the nickel trading debacle last June. Part of the problem is that only about 21% of global production or 650,000 tonnes can be delivered against the LME nickel contract. "The LME Nickel Committee will continue to explore whether any changes to the LME Nickel contract ... may be beneficial to the market," the LME said.

The additional demand for liquefied natural gas (LNG) and tighter supplies of piped gas placed enormous strain on the global market, spurring an energy crisis that pushed gas prices to historic highs. Newcastle coal futures have soared almost 140% in 2022, the biggest jump since 2008. U.S. gas futures jumped by more than 20% and Dutch wholesale gas prices rose by almost 8%, both rising for a third consecutive year. Power-generation fuels - coal, natural gas and gasoil - outperform other energy products in 2022 following cut in Russian energy supplies to EuropeBecause Europe will continue to import LNG to rebuild gas inventories next year after winter, gas prices are expected to remain elevated as limited new supplies come onstream. However, a European cap on gas prices starting in February could keep a lid on the market and reduce the volatility seen this year.

Industrial metals, iron ore and rubber are on track to finish in negative territory, pushed down in 2022 by China's strict zero-COVID policy and fears of a world recession. The additional demand for liquefied natural gas (LNG) amid tighter supplies of piped gas placed enormous strain on the global market, spurring an energy crisis that pushed gas prices to historic highs. U.S. gas futures and Dutch wholesale gas prices have jumped by more than 20%, rising for a third consecutive year. Power-generation fuels - coal, natural gas and gasoil - outperform other energy products in 2022 following cut in Russian energy supplies to EuropeBecause Europe will continue importing LNG to rebuild gas inventories next year after winter, gas prices are expected to remain elevated amid limited new supplies coming on-stream. However, a European cap on gas prices starting in February could help keep a lid on the market and reduce the volatility seen this year.

☆ Growth constraints to shackle industrial metals for a few more months
▼ + stars: | 2022-12-30 | by ( Pratima Desai | ) www.reuters.com time to read: +3 min

Nickel and tin have slumped 50% and 70% respectively. Spiralling inflation, COVID lockdowns in top consumer China and aggressive interest rate rises are behind economic weakness and dwindling demand growth for industrial metals such as copper, used in the power and construction industries. However, BoA noted that metals prices had already fallen significantly and that they would outperform energy in the first half of next year. For soldering material tin, a major theme is consumer belt tightening, which has hit demand for electronic goods. "Slowing (tin) demand is perhaps best illustrated by global semiconductor billings, which had retraced 18% by September, since reaching an all-time high in February," Macquarie analysts said in a note.

☆ Analysis: Turbulence still haunts LME nickel, months on from trade debacle
▼ + stars: | 2022-12-12 | by ( Pratima Desai | ) www.reuters.com time to read: +5 min

Months after turbulence highlighted shortcomings in LME oversight, the nickel contract remains broken. Declining liquidity, together with low stocks, has led to high LME nickel prices this year, pushing up costs for industrial users already grappling with surging inflation. LIQUIDITY SLUMPSMany investors, traders, consumers and producers have abandoned LME nickel in the aftermath of the chaos in March. LME nickel typically trades at a discount to the Shanghai Futures Exchange (ShFE) contract because China is a net importer of nickel and the ShFE nickel price takes into account logistical costs and local taxes. "There's a major disconnect between LME nickel (futures) and the physical market," a nickel trader said.

It could also negatively impact African nations that produce battery materials. The United States has a Free Trade Agreement in place with only one African country, Morocco. Battery materials and trade are set to be a focus at next week's U.S.-Africa Leaders' Summit in Washington where President Joe Biden will meet presidents of African countries including Congo. Under IRA, U.S. carmakers will get tax credits if they source at least 40% of battery materials domestically or from American free-trade partners. His is one of many projects across sub-Saharan Africa aiming to produce battery materials like lithium, nickel and graphite.

[1/2] The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, July 18, 2017. REUTERS/Arnd Wiegmann/File PhotoLONDON, Dec 6 (Reuters) - Shares in miner and trader Glencore (GLEN.L) fell as much as 3.5% on Tuesday after 2023 production guidance across all the commodities it mines missed consensus estimates. The company gave guidance towards copper production of 1.04 million tonnes in 2023, down from 1.06 million this year and compared to a consensus of analysts at 1.124 million tonnes. Glencore expects 2022 EBITDA (earnings before interest, tax, depreciation and amortization) at $28.7 billion and free-cash-flow at $14.7 billion. Roughly 20% of total copper output comes from the mine.

REUTERS/Maja Smiejkowska/File PhotoCommodity trade finance covers many types of loans, typically from banks, that facilitate global movement of goods from wheat to gasoline. Most trade finance loans are short-term, less than a year. Traders’ credit lines became strained last year when natural gas prices sky-rocketed in the fourth quarter. ‘DESIRE TO DIVERSIFY’Lending for commodity trade finance has become more diverse, with non-bank financial institutions (NBFI) stepping in. The underlying issue was the retreat of major banks from commodity financing after some 2020 defaults in the sector while Russian banks Sberbank and Gazprombank that were set to expand have now been shut out of Europe.

Commodity trade finance covers many types of loans, typically from banks, that facilitate global movement of goods from wheat to gasoline. Most trade finance loans are short-term, less than a year. The involvement of hedge funds in commodity trade finance has created a lifeline for smaller firms, deemed to be higher risk for banks due to strict capital requirements and clean energy goals. 'DESIRE TO DIVERSIFY'Lending for commodity trade finance has become more diverse, with non-bank financial institutions (NBFI) stepping in. The Swiss firm specialises in financing small to mid-sized commodity merchants and has achieved returns between 6% to 10% over the last 10 years.

☆ LME will not ban Russian metal from its system
▼ + stars: | 2022-11-11 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 11 (Reuters) - The London Metal Exchange (LME) said on Friday it will not ban Russian metal from being traded and stored in its system because for the most part a significant portion of the market is still planning to accept it in 2023. The exchange, the world's oldest and largest market for industrial metals, launched a discussion paper on the subject in October, asking for market opinion. "The LME does not propose at this time to prohibit the warranting of new Russian metal nor to impose thresholds or limits to the amount of Russian stock permitted in LME warehouses," the exchange said in a statement. "While there is evidently an ethical dimension as to the global acceptability of Russian metal, we believe the LME should not seek to take or impose any moral judgements on the broader market." The exchange said it will continue to monitor the flow of Russian metal in LME warehouses and to provide transparency it will publish regular reports from January 2023 detailing the percentage of warranted Russian metal in LME warehouses.

The drop is not just because industrial companies are turning down thermostats, they are also shutting down plants that may never reopen. And while lower energy use helps Europe weather the crisis sparked by Russia's war in Ukraine and Moscow's supply cuts, executives, economists and industry groups warn its industrial base may end up severely weakened if high energy costs persist. Reuters GraphicsThe International Energy Agency estimates European industrial gas demand fell by 25% in the third quarter from a year earlier. "We are doing all we can to prevent a reduction in industrial activity," an European Commission spokesperson said in an email. "From Jan. 1, we will be able to switch to oil," company executive Wolfgang Ott said, as the company seeks government help to cushion energy costs.

Aluminium ingots are seen outside a warehouse that stores London Metal Exchange stocks in Port Klang Free Zone, outside Kuala Lumpur, March 23, 2015. Another source with direct knowledge said that the aluminium delivered to Gwangyang was produced by Rusal. The sources did not say how much of Rusal's aluminium had been delivered by Glencore to LME warehouses in Gwangyang. Glencore and the London Metal Exchange declined to comment. Stocks of aluminium in LME warehouses jumped 65,825 tonnes to 433,025 tonnes on Friday.

☆ Aluminium spikes 7% after report of U.S. ban of Russian supplies
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 12 (Reuters) - Aluminium prices on the London Metal Exchange (LME) soared on Wednesday after Bloomberg reported that the United States was considering a ban on Russian aluminium in response to the conflict in Ukraine. Benchmark aluminium was up 3.3% at $2,309 a tonne at 1612 GMT after briefly spiking 7.3% to $2,400 a tonne. The Biden administration is considering raising tariffs on Russian aluminum to levels so punitive they would effectively ban Russian aluminium producer Rusal, Bloomberg said, citing unnamed people familiar with the decision-making. The LME last week launched a discussion paper on the possibility of banning Russian aluminium, nickel and copper from being traded and stored in its system. Western countries have imposed sanctions on Russian banks and wealthy individuals connected to President Vladimir Putin since Russia's invasion of Ukraine began in February, but so far there are no restrictions on buying Russian metal.

☆ UK court says Elliott, Jane Street can sue LME for cancelled nickel trades
▼ + stars: | 2022-10-10 | by ( Pratima Desai | ) www.reuters.com time to read: +2 min

LONDON, Oct 10 (Reuters) - A British court has granted permission for U.S.-based hedge fund Elliot Associates and Jane Street Global Trading to sue the London Metal Exchange (LME) for cancelling nickel trades in March, a court document showed. Elliott and Jane Street are demanding damages of $456.4 million and $15.34 million respectively, after the nickel price topped a record $100,000 per tonne on March 8, prompting the LME's suspension of nickel trading and voiding of trades. The nickel trading episode has been the biggest crisis to hit the world's oldest metals forum in decades. "The LME therefore continues to consider that Elliott's and Jane Street's grounds for complaint are without merit, and the LME will defend any judicial review proceedings vigorously." Elliott Associates declined to comment and Jane Street did not immediately respond to a request for comment.

☆ LME to discuss banning Russian metal, sources say
▼ + stars: | 2022-09-29 | by ( Pratima Desai | Jefferson Kahinju | ) www.reuters.com time to read: +2 min

LONDON, Sept 29 (Reuters) - The London Metal Exchange (LME) is planning to discuss banning new deliveries of Russian metal such as aluminium, nickel and copper so its warehouses cannot be used to offload hard-to-sell stock, three sources familiar with the matter said. Western countries have sanctioned Russian banks and wealthy individuals connected to President Vladimir Putin since Russia’s invasion of Ukraine, but so far there are no restrictions on buying Russian metal. The sources said there was some concern that Russian aluminium producer Rusal would not be able to sell its metal and would deliver it to registered warehouses of the 145-year-old metal exchange. Another source said the LME could not ban Russian metal without sanctions on the companies that produced them. "Although we do not currently see any evidence of LME warehouses being used to offload metal on a long term basis," the exchange added, in response to a request for comment.

Such sanctions would prohibit Gazprom from paying Ukraine transit fees, which analysts say could end Russian gas flows to Europe via the country. "(Sanctions) would make into reality the worst-case scenario that European governments have been preparing for all summer, a European gas market without Russian gas," said Natasha Fielding, head of EMEA gas pricing at Argus Media. "Transit through Ukraine is the only Russian gas delivery route to Europe still in use besides the Turkish Stream pipeline, which serves southeast European countries," she added. Gas flows via the only operational Ukraine transit route through Sudzha are currently around 42 million cubic metres a day. As a result, European gas storage was 88% full as of Sept. 26, although there are variations between countries.

Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, U.S., June 30, 2022. read moreTsingshan has approached at least two LME brokers to become a client or increase credit lines after JPMorgan's actions, two sources with knowledge of the matter said. JPMorgan declined to comment and Tsingshan was not immediately available for comment via phone or email. In March, JPMorgan had the largest exposure of about 10 banks and brokers to large short positions, or bets on prices falling, held by Tsingshan. “And now those clients that have been reliant are finding that the cost of credit and access to liquidity is difficult post the war,” he said.

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