Glencore declined to comment.
Trafigura recently alleged that it had found "systematic fraud" in cargoes that should have contained nickel deliverable against LME contracts, but did not. Last week Trafigura said the non-conforming nickel warrants the LME cancelled had no connection with its alleged fraud. "We do not own any of the nine warrants that have been invalidated by the LME," the Swiss-based commodity trader said.
Another source familiar with the matter said U.S. bank JPMorgan owned the warrants the LME cancelled. Warehousing sources say the substitution of stones for nickel would have been discovered if the bagged nickel briquette had been weighed, which the warehouse company should do before putting metal on warrant. Checking the weight of bagged nickel briquettes before warranting for delivery against LME contracts is standard operating procedure, they said. Owned by Hong Kong Exchanges and Clearing , the LME last week reminded operators in its network of more than 500 approved facilities of the strict requirement to weigh all metal before it is placed on warrant. "There is no indication that LME rules and regulations were not followed when the material was warranted," Access World told Reuters earlier on Tuesday.
The LME on Friday postponed resuming nickel trading during Asian hours by a week to March 27 after saying it had found problems with stored nickel. The delay is a blow for the world's largest and oldest forum for trading metals, which was relying on Asian hours trade to boost liquidity and revive its nickel contracts, where volumes have slumped since March 2022. Asian nickel trading was halted following a crisis in March 2022 when the LME suspended the market for the first time since 1988 after prices jumped to a record above $100,000 a tonne in disorderly trade. (Reporting by Pratima Desai; additional reporting by Eric Onstad and Polina Devitt; editing Jason Neely, Josie Kao and Louise Heavens)
