Plans for two new nickel trading platforms aimed at challenging the London Metal Exchange (LME) have been derailed by BHP’s planned suspension of its nickel operations in Western Australia. This decision has hindered BHP from committing its nickel volumes to these new platforms, which were crucial for their launch and competitiveness against the LME.
The LME faced significant backlash after a market meltdown in March 2022, leading consumers and producers to seek alternatives. Both new initiatives received backing from BHP, which criticized the LME for not accurately representing the physical nickel market and called for reform. However, without BHP’s participation, these platforms are now searching for other nickel supply sources.
Global Commodities Holdings Limited (GCHL), based in the UK, announced plans to launch a physical nickel platform shortly after the 2022 crisis, where nickel prices surged above $100,000 per metric ton before trading was halted. Similarly, Abaxx Technologies, a Canadian-listed firm, aimed to introduce the world’s first contract for nickel sulfate, essential for electric vehicle batteries.
However, BHP’s decision to suspend its Kwinana nickel sulfate refinery and other facilities has disrupted these plans. Sources indicated that BHP’s inability to publicly commit to the new platforms reflects poorly given its recent operational shutdowns. Although BHP remains a shareholder in GCHL and is expected to join the nickel platform led by former LME CEO Martin Abbott, the immediate future of these initiatives is uncertain.
GCHL’s CEO Martin Abbott acknowledged the disruption caused by BHP’s decision but noted that the underlying standard contract for their nickel project is complete and usable.