A stampede to cover short positions resulted in nickel prices spiking more than 50% in a matter of hours to a record above $100,000 a tonne on March 8 when the LME suspended nickel trade for more than a week, for which it is being investigated by British regulators.
Nickel is mostly used to make stainless steel, but it is also a key material for the electric vehicle industry, where it is used in the cathode component of batteries.
Nickel volumes on the LME, the world's oldest and largest forum for industrial metals trading, crashed 28% last year from 2021. The contract remains broken due to many users abandoning the market and the suspension of trading in Asian hours.
The exchange said the additions to the nickel committee would "further broaden representation in committee discussions - particularly concerning any potential enhancements to the contract".
"The LME's immediate priority is to work with industry participants to ensure nickel pricing and trading meets their evolving needs as we look to reopen nickel trading in Asian hours and build up liquidity in the contract."
Sources with knowledge of the matter told Reuters earlier this month that Britain's financial watchdog is blocking the restart of London Metal Exchange nickel trade in Asian hours due to doubts about the LME's ability to run an orderly market in that time zone.
Part of the problem for the exchange is the nickel that can be delivered against the LME's contract. Last year this amounted to only 650,000 tonnes or around 21% of global production compared with 50% in 2012.
The exchange is looking into the potential for a nickel pig iron contract, mostly from Indonesia, expected to account for nearly half of global nickel supplies estimated at more than three million tonnes this year.
The new members include global mining giant BHP Group, stainless steel producer Aperam and trading companies Cronimet and IXM.
The LME is owned by Hong Kong Exchanges and Clearing Ltd..
(Reporting by Pratima Desai; editing by Chizu Nomiyama)
By Pratima Desai
