Stainless Espresso: LME can't get a grip on its own chaos
Stainless Espresso: LME can’t get a grip on its own chaos

March 22, 2022 – The London Metal Exchange (LME) has again yesterday, Monday, the chaos in nickel trading not really under control and had to cancel trades for the third time. The chaos holds more and more parallels to the German Wirecard scandal from 2020. South African steel mill must shut down blast furnace. European heavy plate prices gallop away. And what are actual stainless steel and aluminum prices doing?

LME can’t get a grip on its own chaos

For the third time since the restart of nickel trading, the LME has had to admit to a Nickel Official Price Disruption Event. Shortly after the restart on March 16, then on March 18 and now again on March 21, 2022. At the same time, the trades executed at the respective time were cancelled by the LME.

Is the nickel price deliberately manipulated?

These new incidents and also the circumstances, which led to the distortions in the LME nickel trade, raise more and more the question whether here consciously in favor of the shareholder of the London Metal Exchange manipulatively into the market is intervened?

First nickel price spike on January 21, 2022

The first major price spike in nickel, which ultimately led to prices of more than USD 100,000 per ton, took place on January 21, 2022. Nickel reached its then high of $23,720 per ton on that day. It had thus already gained more than 22% in price from the previous month.

HKEX and LME CEO part ways on Jan. 21

At the same date, the Hong Kong Exchange, parent company of the London Metal Exchange, announced:

“Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) announces that after more than nine years with the business, Matthew Chamberlain, CEO of the London Metal Exchange (LME) and Group Head of Commodities, will be stepping down on April 30, 2022 to pursue career interests outside of the Group.”, 21 January 2022

This does raise legitimate questions. Also what the CEO might have known about what was coming. And why it was not prevented by HKEX, LME and shareholders?

Memories of Wirecard scandal

This all sounds an awful lot like the German Wirecard scandal from 2020 and brings back unpleasant memories.

When will the regulators finally intervene?

The most important question remains: When will regulators and supervisors intervene in these more than questionable goings-on at the LME Nickel market? It seems that things are no longer legal there.

Does real trading still take place on the LME with nickel or is only manipulating intervened, in order to save distressed commitments? Thus, at least the largest US bank seems to have profited from the Brexit. For much less suspicion, many others in EU member states have already ended up in custody.

Which nickel prices are currently still credible?

If you now look at the manipulated values on the LME, you would naturally like to know where the real or daily price really is. We see more reliable figures on the Chinese spot market. There, nickel is quoted today, March 22, 2022, at around USD 33,200 per ton.

ArcelorMittal South Africa shuts down blast furnace

Steelmaker ArcelorMittal will have to shut down at least one blast furnace at its Vanderbijlpark steel plant due to logistics problems and a shortage of raw materials. ArcelorMittal South Africa has an annual production capacity of around 7 million tons of crude steel.

Europe: Plate prices pick up significantly

Plate is currently one of the products most in demand on the European market. Plate prices shot up last week due to the turmoil on the global steel market caused by the Russia-Ukraine conflict. And the availability of heavy plate is currently extremely low as a result. Shortly after the outbreak of the crisis, steel prices had already risen by almost 40% in some cases.

What are aluminium and stainless steel doing?

Spot market prices for nickel in China are now around USD 33,200. Chinese spot prices for stainless steel are also rising by up to 1%. LME aluminium had made yesterday a significant jump of more than 3.6% upwards after Australia announced that it would impose an export ban on alumina to Russia.

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