LME to Require Warehouses to Feel Their Nickel Bags After Heist
- Exchange is mandating more checks for nickel stored in bags
- Market was rocked in March by discovery of bags of stones
The LME will now require warehouse companies to carry out additional checks on nickel bags.
Photographer: Dimas Ardian/Bloomberg
The London Metal Exchange is tightening rules for handling nickel by its network of warehouses, following the shock discovery earlier this year that some of its nickel contracts were instead backed by bags of stones.
The LME will now require warehouse companies to carry out additional checks in an attempt to prevent a repeat of the scandal, according to people familiar with the matter. The tests include using magnets and metal detectors to ensure that the bags do in fact contain metal, and a so-called “touch inspection,” which involves warehouse workers feeling the outside of the bags to verify that the material inside is an appropriate size and shape.