Javier seems quite angry.
The money rightfully should have gone to the bullish bettors but these days nothing's done 'til the wires clear. And are in a jurisdiction beyond the reach of sanctions, clawbacks or other fancy words for taking.
Bloomberg Opinion, March 9:
This matters beyond the cozy world of metals trading. In the past, nickel was largely used to produce stainless steel, but the metal today is a critical component of high-efficiency batteries for electric cars. Last month, Elon Musk, the founder of Tesla Inc., tweeted his company’s “biggest concern” was nickel supply.For nickel traders, the LME is the main market. That’s where Xiang, also known as “Big Shot,” built his bet over several months. The position was perhaps the worst kept secret of the market, and the LME was aware of its existence.His wager collapsed very much like Rich’s did. Except that 30 years ago, zinc prices fell; Xiang’s undoing was nickel rallying. As the price went up, bearish investors like Xiang tried to buy back their bets, triggering a short-squeeze. Until then, the market, though messy, was still relatively orderly.Then, things got weird. The more the traders bought, the more they pushed the price higher in a self-feeding frenzy. Nickel prices jumped 90% on Monday, the biggest ever one-day jump. Despite clear signs of stress, the LME decided to re-open in the early hours of Tuesday. But the short-squeeze got worse overnight in London and prices climbed much higher. At one point, they hit an all-time high of $101,365 per metric ton, up from $20,175 a ton in January. At 8:15 a.m. in London, the LME finally closed the nickel market. By then, commodities traders had been busy betting billions of dollars in nickel and other cross-commodity deals. The LME also decided to cancel all the overnight transactions, which made a farce of its principles of free-and-fair trading.The exchange should have shut down at the end of Monday — and the U.K. regulator, the Financial Conduct Authority, should have insisted on it. The LME needs to own that it created a problem with its decision to allow trading to continue. Hundreds of millions of dollars in profits – and losses – have now vanished because it has scrapped the overnight trades. Why did it do that? No one seems to know.
The exchange probably fears that several of its members would had gone out of business if the trades had stood. If that’s the case, the LME is, in effect, bailing them out with money that belongs to the bullish traders who would have made profits overnight....