LME takes place in the metal warehouse bags of stones nickel
The London Metal Exchange has found sacks full of rocks in one of its warehouses instead of the nickel they were supposed to contain in the latest drama about the scandal-ridden metals market.
The exchange said in a note to the market on Friday that it had “received information that a number of physical shipments of nickel from a particular LME-licensed storage operator’s facility were subject to such irregularities.” The alleged nickel shipments were actually filled with rocks, said a person familiar with the matter.
The LME added that the irregularities in the bagged nickel are “detectable, among other things, by the weight of the bags” and “reminds licensed warehouse operators of the strict requirement to weigh all metals before placing them in those permitted by the exchange”. Camp.
The discovery comes just weeks after Trafigura, one of the world’s largest metals traders, uncovered a $577 million nickel scam that has rocked the extractive industry.
The alleged nickel was stored in Rotterdam at a warehouse operated by Access World, which until January was owned by Trafigura’s commodity trading competitor Glencore, according to a person familiar with the matter.
Glencore declined to comment. Access World did not respond to a request for comment.
The inclusion of the fake show in the LME’s system is a further blow to the reputation of the 146-year-old exchange after last year’s controversial decision to halt nickel trading after a historic price surge, a move that has sparked regulatory investigations and lawsuits from investors has drawn .
Following the discovery, the LME asked the warehouse operator to conduct an inspection, which found nine cases of missing nickel totaling 54 tons of material worth $1.3 million. The LME has instructed all of its licensed storage operators to repeat inspections of stored nickel to check for irregularities.
Trafigura announced last month that it had issued a freezing order and pursued legal action against Indian businessman Prateek Gupta for his alleged role in the sale of more than 1,100 casks meant to contain high-grade nickel, but it did not.
The Singapore-based company said in a statement that the matter “is unrelated to Trafigura’s legal action against a group of companies affiliated with and apparently controlled by Prateek Gupta.”
The exchange declined to comment on whether the fake nickel in its inventory is linked to the scam uncovered by Trafigura.
To restore confidence in the nickel market after last year’s controversy, the LME had planned to reopen nickel trading during the Asian hours on Monday, which had been closed since that time last year.
However, the LME has postponed the reopening of trading during Asian trading hours by a week due to the risk of further finds of erratic nickel shipments in warehouses.
https://www.ft.com/content/a8c4d8d5-7c81-4c54-a90a-9f3f60d1bdd2 LME takes place in the metal warehouse bags of stones nickel