Trading volumes on the London Metal Exchange (LME) surged 27% in the second quarter to the highest in a decade, with a sharp increase in the LME’s nickel contract leading activity gains across its major metals.

The latest performance marks a dramatic turnaround for the London exchange, which had grappled with a yearslong decline in volumes even before the March 2022 nickel crisis that shattered confidence in the trading venue. The LME’s decision to suspend its nickel market and cancel US$12 billion of trades angered investors, driving many away from the market, and drew lawsuits and regulatory scrutiny.

The exchange has announced a series of reforms in the wake of the crisis to help restore confidence, at the same time that investors have been paying more attention to metals and commodities more broadly. Copper surged to a record in May on a wave of speculative money betting on future shortages, although prices have since retreated after focus shifted back to weak Chinese demand at the moment.

The LME’s nickel contract has picked up dramatically this year, with daily volumes finally resembling pre-crisis levels for the first time. Average daily trading volumes in the first half increased 76% compared with the same period last year, while open interest in the nickel market more than doubled, the LME said.

  - Bloomberg