The London Metal Exchange's (LME) benchmark nickel contract fell again today but for the first time since resuming trade on March 16 the contract did not hit its downside limit and metal was changing hands.
The pick-up in activity suggests the market is starting to return to normal.
This follows two weeks of chaos in which the world's most important nickel trading venue endured a price surge followed by a six-day trading suspension and a problematic restart hit by technical glitches.
LME three-month nickel tumbled as much as 13.9% to $27,020 a tonne after today's market open before easing to around $28,300, down 10%, in later morning trade.
The exchange suspended nickel trading on March 8 after prices of the metal used in stainless steel and electric vehicle batteries spiked by more than 50% in a few hours to over $100,000 a tonne.
Trading resumed on March 16 with an adjusted starting price of under $48,000 and a daily down limit that started at 5% and was later increased to 15%.
It has hit these limits immediately after the market open each day since, with only a few contracts changing hands.
Around 6,000 contracts representing 36,000 tonnes of nickel had traded this morning, compared to around 9,000 contracts a day on average between the start of this year and March 8.
Traders had expected prices to fall until they reach the levels on the Shanghai Futures Exchange (ShFE) after an adjustment for costs such as transport, insurance, import duty and other fees.
"You could argue that it's mission accomplished (for the LME), but it's left the market bloody and bruised," said Saxo Bank analyst Ole Hansen.
He said opening volumes were relatively low considering the pent-up need to trade and this could indicate that some investors are wary of returning immediately to the market.
The turbulence on the LME has led to anger among some traders, but frustrated investors who may want to shift their business elsewhere have found there are no quick and easy alternatives.
