The London Metal Exchange (LME) said on Thursday it had approved nickel produced by Quzhou Huayou Cobalt New Materials, a subsidiary of China's Zhejiang Huayou Cobalt Industry, as a listed brand and expected more brand applications in the coming months.
It is the first new brand to be approved for delivery of nickel contracts with the LME since the LME shortened the waiting time for listings, as part of the exchange's plan to revive nickel trading volumes after the 2022 crisis.
On March 8, 2022, the price of nickel on the London Metal Exchange (LME) doubled in a matter of hours due to trading chaos, prompting the world's largest and oldest metals forum to suspend its nickel market for the first time since 1988 and cancel all nickel trading for the day.
Since then, volumes have picked up as some market participants have returned to the contract, but the timing of a full recovery remains uncertain.
"We expect to receive further fast-track applications in the coming months," the LME said. The LME is owned by Hong Kong Exchanges and Clearing.
Industry sources said the fast-track application could help improve the liquidity of LME nickel, although more than one new brand would be needed to address the issue of nickel stocks in LME-registered warehouses. Nickel stocks in LME-registered warehouses are at their lowest level since 2007.
So-called primary metals - metals that can be delivered under LME contracts - account for only about 18 per cent of global supply this year, which is expected to be about 3.3m tonnes.
"Given the projected growth in Grade 1 nickel production from new sources, the LME's fast-track approach and fee waivers for the new LME Nickel brand are designed to encourage greater stock and liquidity without relaxing our metallurgical or responsible sourcing requirements," the LME said.
