Oliver Wyman was engaged to undertake an independent review of events in the nickel market leading up to the LME’s decision to suspend the market on 8 March 2022.

The final report and the LME’s initial response were published on 10 January 2023:

Independent Review of Events in the Nickel Market in March 2022: Final Report (PDF)

Notice 23/007: LME Group Response to Oliver Wyman Independent Review (PDF)

The publication of this report is an important further step in rebuilding confidence in the LME nickel market and we look forward to expanding on the work we have already done since March 2022 to support the long-term health, efficiency and resilience of the market as a whole.

Oliver Wyman independent nickel market review – June-December 2022

In June 2022, the LME selected Oliver Wyman to conduct an independent review (PDF) into events in the nickel market leading up to the suspension in March 2022.

Notice 22/181: Independent Nickel Market Trading Review - Market Engagement (PDF)

Notice 22/168: Independent Review Selection - Oliver Wyman (PDF)

The review included extensive market engagement and data collection and ran until December 2022.

The Oliver Wyman independent review sought to:

  • form a thorough understanding of what led to the market conditions in the Nickel market in Q1 2022 leading up to the market suspension on 8 March 2022
  • consider the factors that contributed to these conditions in the Nickel market
  • identify actions that could be taken by the LME and LME Clear to reduce the likelihood of similar market conditions arising, and mitigate and minimise the impact of them in the event they were to arise.

Market engagement

As part of the fact-finding phase, Oliver Wyman sought to hear views on the following topics:

Physical contract specifications and linkages
Trading limits, controls and rules
  • Supply and demand in the underlying Nickel market, concentrations, and susceptibility to shocks
  • Alignment between the LME Nickel contract and the wider physical nickel market
  • Delivery rules and requirements, lending rules and backwardation limits
  • Position reporting, position limits and accountability levels
  • Trading rules and real-time trading controls
  • Suspicious or anomalous trading activity
Risk management, clearing & collateral model of LME, LME Clear, Members
Market structure and roles of institutions
  • Margining methodology and margin call practices
  • Concentration risks and margin lending practices
  • Capitalisation and liquidity levels across the market and exposure limit setting
  • Loss sharing structures and associated incentive
  • Distribution of liquidity across venues
  • Opening hours and available liquidity
  • Prompt date structure and distribution of liquidity
  • Depth of liquidity and client order routing
  • Price benchmark timing & methodology
Stay up to date

Register with LME.com

Receive full access to all our price data and gain access to our monthly LME newsletter, packed with market tips and insights from our on-staff specialists.