(Adds details, context)
By Pratima Desai and Polina Devitt
LONDON, March 23 (Reuters) - The London Metal Exchange
(LME) said on Thursday it has no reason to believe any other
LME-approved facility is affected by the "irregularities" found
in nine nickel warrants last week at one LME-licensed warehouse.
Last week, the LME cancelled the nine warrants - documents
conferring ownership of metal stored in LME-registered
warehouses - or 54 tonnes of bagged nickel briquette, without
disclosing what was in the bags.
Sources with knowledge of the matter told Reuters earlier
this week that nickel delivered by LME-approved warehouse firm
Access World to commodity traders Trafigura and Stratton Metals
contained stones instead of nickel.
The amounts involved are not large, but industry sources
said the discovery of non-conforming nickel has eroded
confidence in the nickel trade, both globally and on the LME,
the world's oldest and largest forum for metals.
"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," the LME said in a statement.
"We will communicate with the market via notice to confirm
completion shortly."
The LME called on all warehouse operators to undertake
inspections of warranted nickel last week. To give them time to
do that, it postponed the resumption of nickel trading during
Asian hours by a week to March 27.
"We are confident that this is an isolated incident," the
146-year-old exchange said.
Buyers of nickel on the London Metal Exchange nervous about
receiving material that does not meet specification are rolling
their positions forward by selling nearby contracts and buying
them back further out, traders said.
This can be seen in the steep discounts for nearby contracts
against those with a longer maturity .
(Reporting by Pratima Desai; additional reporting by Polina
Devitt; editing by Jason Neely, Kirsten Donovan)
