Nervousness about taking delivery of nickel on the LME can be seen in the steep discounts for nearby contracts against those with a longer maturity.
The discount or contango for the LME's cash against the three-month nickel contract, last at $362 a tonne, is the highest since December 2007. The discount for buying nickel tomorrow and selling it the day after -- known as tom-next -- jumped to $50 a tonne from $5 a tonne at the close on Wednesday. The tom-next contango is the largest since March 7 last year, one day before the LME suspended nickel trading due to prices climbing above $100,000 a tonne in disorderly trade. "The LME has no reason to believe that any other LME-approved facility is affected by the irregularities found in nine nickel warrants last week at one LME-licensed warehouse and we are confident that this is an isolated incident," the LME said in response to a request for comment.
"We are continuing to work with warehouse operators to
complete a thorough check of LME-warranted bagged nickel – the
majority of warrants have now been checked, with no further
irregularities found, and we will communicate with the market
via notice to confirm completion shortly."
The LME last week said it would postpone the resumption of
nickel trading during Asian hours by a week to March 27 after
saying it had found problems with stored nickel.
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Column: The return of the London Metal Exchange's nickel curse ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Pratima Desai; editing by Kirsten Donovan)
