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London Metal Exchange, owned by HKEX, seeks to rebuild reputation, dominance a year after nickel chaos

  • Nickel trading during Asian business hours to resume on Monday, more than a year since it was first paused
  • Fallout from chaos in nickel trading last March has hurt volumes at the 146-year-old commodities bourse, emboldened potential competitors

Reading Time:7 minutes
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Illustration by Henry Wong
Chad Brayin London
This is the second part of a two-part series looking at upcoming changes at Hong Kong Exchanges and Clearing Limited, which operates the Hong Kong bourse and owns the London Metal Exchange. The fallout from the chaos in nickel trading last March has hurt volumes at the 146-year-old commodities bourse, spawned lawsuits and emboldened potential competitors. Part one is here.
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The London Metal Exchange (LME) is still struggling to regain its reputation and standing as the predominant market for trading nickel and other metals vital to the green energy transition after a short squeeze last March threatened to destabilise the nickel market and forced it to cancel billions of dollars of transactions.
More than a year on, the Hong Kong Exchanges and Clearing (HKEX)-owned bourse is facing a series of investor lawsuits and an enforcement inquiry by UK regulators over its systems and controls and handling of the chaos, including new suits filed by 10 hedge funds last week.

The 146-year-old bourse suffered a sharp fall in its annual trading volumes following the episode last March and could soon see competition from a new UK-based platform for physical delivery of nickel, which is used in everything from stainless steel to batteries for electric vehicles.

“Reform of the LME’s metal delivery rules is long overdue,” Australian mining giant BHP said in its half-year economic outlook last month. “The LME short squeeze episode highlighted vulnerabilities that had been building for years.”

13:54

HKEX CEO Nicolas Aguzin on the future of Hong Kong’s capital market

HKEX CEO Nicolas Aguzin on the future of Hong Kong’s capital market

A big test for the bourse will come on Monday when nickel trading will resume during Asian business hours, starting at 9am HKT (1am GMT), following a pause of more than a year.

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