On 8 March 2022, the London Metal Exchange suspended nickel trading and cancelled every trade executed from midnight that day on LMEselect and in the inter-office market. The cancellation covered contracts agreed before the suspension took effect at 08:15. The Courts and Tribunals Judiciary later described the aggregate value of the cancelled trades as about US$12 billion.
The ordinary account is a market crisis: nickel prices rose with exceptional speed, the market became disorderly, and the exchange intervened. The event also exposed a narrower execution boundary. A trade could be agreed and recorded, yet remain subject to venue governance capable of removing it. Execution had occurred. Irreversible finality had not.
The trading morning
Nickel prices had risen sharply on 7 March. In its account published three days later, the LME said that it nevertheless regarded trading through Monday evening as orderly. During the early hours of 8 March, the price then moved rapidly higher. Reuters reported that it more than doubled and exceeded US$100,000 per tonne before the halt.
At 08:15, the LME suspended trading in all nickel contracts. Its first cancellation notice followed at 12:05. The notice directed members to cancel or reverse trades executed on or after 00:00 in the inter-office market and on LMEselect. Corresponding contracts under the LME Clear rules were also to be cancelled once members had actioned the reversals.
The intervention reached beyond the day's matched trades. Open physically deliverable positions due on 9 March, and later prompt dates where delivery was not practicable because of the suspension, were to be rolled at the previous day's cash official price. When the LME set out the reopening arrangements, it deferred specified deliveries to 23 March and required affected longs and shorts to book carry trades under exchange instructions.
The event therefore altered two states at once: trades already executed in the affected window were reversed, and physical delivery dates attached to other open positions were moved.
The authority already inside the market
The intervention power was not written after the price spike. The LME Rulebook published in October 2021 contained the operating structure before the event. Trading Regulation 22.1 allowed the Exchange to halt or constrain trading after a significant price movement over a short period. Where the Exchange considered it appropriate, the same regulation allowed it to cancel, vary or correct an agreed trade or contract.
That wording did not predetermine what the LME would do on 8 March, nor did it make the price movement predictable. It established a prior hierarchy. Individual executions took place within rules that retained an exchange-level intervention power over them.
The resulting structure was more conditional than the electronic match alone showed. Agreement between counterparties was one execution state. Continued recognition of the trade by the venue and clearing system was another.
Why the LME said it acted
The reasons for intervention remain the LME's position, not an independent finding about market necessity. In Notice 22/057, the LME said early-hours pricing no longer reflected the underlying physical market and that the nickel market had become disorderly. It said the extreme price movement and thin volume led it to cancel trades in the interests of market stability and integrity.
The LME also said the price movement had created systemic risk through prospective margin calls and raised a significant risk of multiple defaults. Reuters later reported the exchange's court case as asserting that, without intervention, US$19.7 billion of margin calls would have generated clearing-member defaults.
Those statements explain the rationale advanced by the LME. They do not establish that every market participant accepted it, or that the same rationale would validate a future cancellation in different circumstances.
The claimants' different account
Elliott Associates and Jane Street challenged the cancellation. They alleged that the LME and LME Clear had acted unlawfully and sought compensation for profits they said the cancelled trades would have produced. At the July 2024 appeal hearing, the Courts and Tribunals Judiciary recorded Elliott's claimed lost net profits at about US$456 million. Reuters reported the combined Elliott and Jane Street claims at US$472 million.
At trial, claimant lawyers alleged that the cancellation protected Tsingshan and argued that the exchange could not use its powers in the way it had. Those were claimant allegations. They are not a factual explanation adopted here.
The Divisional Court dismissed the judicial-review claims in November 2023. The Court of Appeal dismissed Elliott's appeal in October 2024, and the Supreme Court refused permission for a further appeal in January 2025. Those outcomes resolved the challenges brought on the facts and rules before the courts. They do not establish universal validity for any future exchange cancellation.
A recorded hedge can lose its execution state
The cancellation did not merely change the market price after participants had traded. It removed the affected executions from the market record and clearing chain. A position that had appeared in the transaction sequence as an agreed trade ceased to occupy that state.
The pre-existing rule structure supports a specific editorial inference. In an exchange-dependent trading arrangement, “executed” and “irreversibly final” are not necessarily the same condition. Finality can remain subordinate to incorporated venue governance, even though neither counterparty has reserved an equivalent bilateral option to withdraw.
That separation extends beyond the cancelled screen trade. Physical purchases, sales or pricing arrangements may use exchange positions as their hedge or reference without sharing the exchange contract's intervention mechanics. The physical bargain can remain in place while the execution expected to offset or price it is cancelled. No specific physical contract is evidenced here as having failed for that reason. The structural divergence nevertheless existed before 8 March because the two instruments could occupy different governance systems.
Reopening did not restore the previous sequence
Nickel trading resumed on 16 March under daily price limits and revised accountability levels. The operational sequence was not simply paused and restarted. The trades from the cancellation window did not return. Delivery positions were carried forward, and the reopened market operated under additional controls.
This matters because the consequence was not confined to delayed access. A suspension preserves a position while stopping new execution. The 8 March measure went further: it reversed specified existing trades. Reopening restored a place to trade, but it did not restore the transactions that had been removed.
The boundary the event made visible
The squeeze was the trigger, not the structurally identifiable exposure. Before it occurred, the exchange rules already placed executed contracts within a governance structure that retained intervention and cancellation authority. On 8 March, that latent hierarchy became operational.
The ordinary account remains correct: an extreme nickel market led the LME to intervene. The additional execution fact is that agreement, recording, clearing and irreversible finality were not one indivisible moment. About US$12 billion of trades crossed the first boundary and were then prevented from crossing the last.
Sources
- London Metal Exchange, Rulebook as of October 2021, Trading Regulation 22.1.
- London Metal Exchange, Notice 22/053 — Nickel suspension: delivery deferral and trade cancellation, 8 March 2022.
- London Metal Exchange, Notice 22/057 — Nickel market update, 10 March 2022.
- London Metal Exchange, Notice 22/064 — resumption of trading, 14 March 2022.
- Courts and Tribunals Judiciary, Elliott Associates v London Metal Exchange — appeal hearing background, 11 July 2024.
- London Metal Exchange, nickel litigation status and judgments.
- Reuters, competing cases presented in the High Court, 20 June 2023.