LME finds ‘irregularities’ in several nickel bags at a warehouse

The London Metal Exchange (LME) on Friday postponed the resumption of nickel trading during Asian hours by a week to March 27 after it found nickel that failed to meet contract specifications at an LME warehouse.

The move is another blow to the world’s oldest and biggest industrial metals market, which had been counting on a restart of Asian trade to boost liquidity in a contact that has been struggling since a nickel crisis a year ago.

The LME said it had cancelled nine nickel warrants – an ownership document for metals placed in an LME-approved warehouse – at one warehouse facility, without naming it.

“The exchange has received information that a number of physical nickel shipments out of one specific facility of an LME-licensed warehouse operator have been subject to such irregularities,” the statement said.

The announcement further undermines trust in the global nickel trade after trader Trafigura last month alleged that it discovered “systematic fraud” in shipments that did not contain nickel and begun legal proceedings against Indian businessman Prateek Gupta and his companies.

“We do not own any of the nine warrants that have been invalidated by the LME,” Trafigura said. There is no connection with Trafigura’s legal action against Gupta either, it added.

A spokesperson for Gupta has said that they were preparing “a robust response” to the allegations.

As each warrant equals about 6 tonnes, 54 tonnes were affected. The LME said the non-conformant warrants represent 0.14 per cent of live nickel stock in its warehouses.

The 146-year-old LME said the issues with nickel related to bagged nickel briquettes, which were found to not have the correct weight.

It did not name the warehouse or its location.

The bags in question were at a warehouse owned by Access World in Rotterdam and contained stones instead of the nickel, Bloomberg reported, citing sources familiar with the matter.

The LME declined to comment on the Bloomberg report and Access World did not immediately respond to an emailed request for comment.

The exchange said it had no reason to believe that any other LME facility was affected, but still called on all warehouse operators to undertake inspections of warranted nickel. To give them time to do that, it is postponing the reopening of Asian trading.

For all the latest business News Click Here 

Read original article here

Denial of responsibility! TechAI is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.