Global Commodities Holdings launches trading in nickel premiums

UK-based Global Commodities Holdings Ltd (GCH) launched trading in premiums for physical nickel on Thursday after an initial nickel product last year failed to gain traction, the company said.

Last year, GCH started trading in fixed-price nickel products, providing an additional venue to the Shanghai Futures Exchange and London Metal Exchange.

The LME lost the confidence of many users after a nickel crisis in 2022, but LME nickel volumes have recently rebounded.

Fixed-priced nickel trading saw modest interest, with participants citing the lack of tools to hedge their price risk, GCH told Reuters.

The new nickel offering will allow buyers and sellers to mitigate the price risk by fixing physical prices in relation to the average settlement price on the LME, the world’s biggest trading venue for nickel and other industrial metals.

It will also allow participants to set variables such as the product, including cathodes and briquettes, origin and delivery point.

Metals group Glencore and South Korea’s POSCO are among firms that have signed up as nickel trading members, GCH said in a statement.

“We’re delighted to be bridging the gap between the detail of a bilateral transaction and the liquidity of a world-class exchange,” said GCH CEO Martin Abbott, formerly head of the LME.

GCH’s main business has been in coal trading, with subsidiary globalCOAL owning and operating the gC NEWC thermal coal index used as the settlement price for the gC NEWC Futures contract traded and cleared by Intercontinental Exchange Europe.

GCH and ICE also aim to create derivatives for nickel once there is enough liquidity and data points, GCH said.

GCH also launched trading on Thursday in manganese ore of South African origin delivered CIF at Tianjin, China.

In the future, GCH aims to also add trading in the raw materials to make aluminum – bauxite and alumina – plus battery metal lithium.

“We can quickly add new products (to the trading platform) underpinned by a generic standard trading agreement that can cover most metal types,” GCH told Reuters.

(By Eric Onstad; Editing by Louise Heavens)