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Nickel Institute reassured by the re-opening of limited trading on the LME, urges LME, the FCA and the Bank of England to swiftly restore stability to the nickel market

TORONTO: 21 March 2022 – The Nickel Institute and its members welcomed the partial reopening of nickel trading on March 16th, however, urges the London Metal Exchange (LME) to push harder to rebuild market confidence in this industry-standard pricing mechanism. The LME, the Financial Conduct Authority (FCA) and the Bank of England must take all necessary measures to resolve all governance and operational aspects that have been identified from the recent suspension and nickel trading activities.

The Nickel Institute expresses concerns on the present and future implications of the situation which has led many market participants to question the lack of transparent pricing, price stability and safeguards. We welcome the recent restart of trading, but the situation remains unstable and significant gaps need to be resolved in the short and medium-term. Additionally, the recent anomalies offer the LME opportunities to learn about how this situation was created, assess opportunities to avoid similar situations and to emerge with a stronger, more transparent, and reliable set of safeguards in place to protect the market and its participants.

“A well-functioning LME is a critical part of enabling nickel’s efficient use, globally,” said Dr. Hudson Bates, President of the Nickel Institute. “Producers and users alike depend on an efficient, transparent, equitable and effective LME. Following the recent disruption to nickel trading, the Nickel Institute is highly concerned about the negative impacts throughout the nickel value chain and on downstream users. There is still a lack of information regarding the outlook for resumption of normal trading on a regular and consistent basis. The current situation is causing major reputational damage for both the nickel industry and the LME with the potential for a loss of confidence and demand destruction for nickel growing by the day. We look forward to the LME clarifying and revising its positions accordingly as the resumption of trading continues.

“The Nickel Institute stands ready to support the LME in helping re-establish a credible path forward given the importance of Nickel to society,” he concluded.

The Nickel Institute is the pre-eminent body for the nickel industry. Its members represent over 60% of Class 1 nickel production globally. The Nickel Institute’s role is to promote and support the science-based safe use of nickel in appropriate applications. Nickel is critical to society, playing a key role in energy transition technologies and batteries for a low carbon future. And its unique properties are also essential in a multitude of applications in our daily lives, from our phones to transport, buildings and health care.