London Metal Exchange uncovers warehouse fraud — RT Business News
It was found that the bagged nickel briquettes were not of the weight specified in the contracts
The London Metal Exchange (LME) discovered “irregularitieswith bagged nickel briquettes in one of its warehouses this week, which forced it to postpone the resumption of nickel trading during Asian hours until March 27.
According to an LME statement, it had to cancel nine nickel warrants at one of its facilities after discovering that the bagged nickel briquettes stored there were not of the weight specified in the contracts.
“The exchange has received information that a number of physical shipments of nickel from a specific LME licensed warehouse operator facility have been subject to such irregularities.“, said the exchange in the press release.
One warrant amounts to about six tons of metal, which means that about 54 tons of nickel from the LME has been affected. The exchange said this represented 0.14% of its live nickel stocks. Although the LME said it had no reason to believe its other warehouses had been compromised, it asked operators to recheck their stored guaranteed nickel. He added that metals that do not allow bagged delivery”are not sensitive to this type of irregularity.”
The exchange did not name the warehouse or its location, but several outlets later reported, citing sources, that the alleged nickel bags were actually filled with stone. The fake nickel is believed to have been stored in an LME warehouse in Rotterdam operated by Access World, which declined to comment on the news.
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This announcement follows another scandal involving nickel at the trading giant Trafigura. Last month, the company said it found “systematic fraud » in shipments that did not contain the metal specified in the contracts, and faced millions of dollars in losses. Trafigura has taken legal action against Indian metals tycoon Prateek Gupta and his companies for alleged fraud.
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