The London Metal Exchange is being taken to the High Court and sued for $456m in damages for cancelling nickel trades by fund manager Elliot Associates.
Nickel is used for rechargeable lithium battery production and a surge in demand of the 8th March 2022 prompted the LME to suspend and cancel trades.
Russia is one of the main sources for nickel supplies globally and to quote the LME: the market was trading in a “disorderly” fashion “dramatically in short period of time” and it has acted in the interest in the market as a whole” to protect the market and investors.
It is common for many shares and commodity exchanges to suspend trading when unusual activity is taking place. Fraud, price fixing, money laundering and manipulation of markets have sadly been common over recent years. That said, Elliot Assiciates contend that this was “unlawful” and prevented it from its legal right to trade.
This is a tough one given that sanctions have been in force on Russia since the invasion and all financial markets must tread carefully when dealing with matters that affect trade, revenue and other financial matters linked to Russia. That said, LME is not Russian, it is based in London and owned by Hong Kong Exchanges and Clearing Limited.