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LME Sets Daily Price Limit for All Its Physically Delivered Metals

The LME has imposed a 15% price cap on all physically delivered metals and cash-settled cobalt to stabilize the market, the LME said.

The press release states,

“The LME has introduced 15% upper and lower daily price limits for all its physically delivered metals (and cash-settled cobalt to ensure consistency across its two cobalt contracts), to provide an extra market stabilisation mechanism.”

With this, the LME takes another step toward price control, after nickel trading was suspended at the beginning of March. Nickel had made a strong jump of +50% to over $100,000 per ton at the beginning of March. This prompted the LME to suspend nickel trading for the time being. Nickel trading could resume on March 16 but on a heavily restricted basis.

According to the LME, the problems were of a technical nature and therefore only a small number of trades could be carried out,

“To support the re-opening of the Nickel market on 16 March 2022, the LME introduced new features to enable LMEselect to support daily price limits. However, the speed at which this technology had to be implemented to re-open the Nickel market resulted in some initial technology issues that allowed a very small number of trades to execute below the lower limit on 16, 17 and 18 March 2022. These trades were cancelled in accordance with the LME’s Rules and procedures.”

Accordingly, the trades concluded in the days from March 16 to 18, which were below the lower limit, were canceled by the LME.

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