Money & Finance › Markets of the world › Commodities: oil, metals and crops
London Metal Exchange and the 2022 nickel squeeze
Since 1877; nickel halt Mar 2022· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The world's main exchange for industrial metals such as copper, aluminum, nickel and zinc, owned by Hong Kong Exchanges since 2012.
See it on the Money & Finance map →How it works
Founded in 1877, the LME still runs the Ring, Europe's last open-outcry trading floor, alongside electronic trading. Contracts can mature on any business day up to three months out, then weekly, then monthly. Sellers can deliver metal into hundreds of LME-approved warehouses worldwide. In March 2022, after Russia invaded Ukraine, nickel rose about 250% in two trading days, briefly topping $100,000 a ton, squeezing large short positions held by China's Tsingshan. The LME halted trading for a week and canceled about $3.9 billion of trades.
Why it matters
Its prices are the reference for metal contracts worldwide; the nickel episode shook trust in the exchange and led to the first UK fine of an exchange.
Facts, rules and data
LME rulebooks and warehouse reports, the FCA's March 2025 final notice fining the LME £9.2 million, and English court rulings upholding the cancellations (2023–24).
Debates and risks
Critics argued canceling trades favored short sellers; the LME said it prevented member defaults, and courts found it lawful. Whether it was fair remains disputed.
Connections (3)
▸Hong Kong Exchanges (HKEX) and the Hang Seng index has owned since 2012 London Metal Exchange and the 2022 nickel squeezeFact, law or data
The connection
Hong Kong Exchanges and Clearing bought the LME in December 2012 for about £1.39 billion, betting that China, which uses about half the world's industrial metals, would want to trade and price them through a Hong Kong–owned exchange. HKEX later opened a commodities platform in Shenzhen (2018), and in 2025 the LME added Hong Kong as a delivery location.
When and why
Announced June 2012 and completed December 2012; HKEX chief executive Charles Li led the purchase.
How we know
HKEX and LME announcements, UK regulatory approval of the deal, and HKEX annual reports listing the LME as a subsidiary.
Debates and risks
Whether the price paid off for HKEX shareholders, and whether Chinese ownership shaped the 2022 nickel decision, as some critics suggested; the LME denies it.
▸London Metal Exchange and the 2022 nickel squeeze sets world prices for metals among Commodities: oil, metals and cropsFact, law or data
The connection
LME prices are the reference for physical metal deals worldwide: a copper mine in Chile or a wire maker in Korea typically sells or buys at an LME price plus a premium. LME warehouse stocks signal supply tightness, and its three-month copper price is watched as a gauge of the world economy.
When and why
London, since 1877; key metals include copper, aluminum, zinc, nickel, lead and tin, with official prices set daily.
How we know
Industry contracts referencing LME official prices, LME warehouse stock reports, and economic studies of copper as an indicator.
Debates and risks
Whether the Shanghai Futures Exchange, now busier in some metals, will take pricing power from London as China dominates demand.
▸London Metal Exchange and the 2022 nickel squeeze trades daily-dated forwards rather than standard Futures contractsFact, law or data
The connection
Standard futures expire on set monthly dates. The LME keeps its 19th-century merchant design: contracts can be set for any business day up to three months out, traditionally explained as the time a ship took to carry copper from Chile to London. Trades are cleared centrally, but the date flexibility works more like custom forwards.
When and why
London; the LME's own clearing house, LME Clear, opened in 2014, replacing outsourced clearing.
How we know
The LME rulebook and contract specifications, compared with CME and Shanghai exchanges' monthly futures.
Debates and risks
Whether the complex prompt-date system serves physical users or deters financial traders, and whether the LME should move closer to standard futures.