The chair of the London Metal Exchange (LME), Gay Huey Evans CBE, announced that she will step down from her role in the wake of a nickel trading scandal that has shaken the exchange. The scandal, which was sparked by volatile prices in the nickel market in March due to the war in Ukraine, prompted the LME to shut its doors due to “disorderly” trading conditions. The exchange then took the controversial step to cancel around $3.9 billion of trades, which sparked a backlash from some traders. In a statement, the LME announced that Evans would not seek re-election and would step down once a new chair has been appointed.
In a statement, Evans acknowledged the crisis and said she had overseen a period of “significant change” at the LME. She also mentioned that during her tenure the LME had made achievements in areas such as sustainability, new technology infrastructure, diversity and inclusion.
Why it matters:
Involving nickel trading and the subsequent shutdown of the LME, this scandal had a major impact on the industry, causing huge paper losses for some traders. One of the major affected was the world’s biggest nickel producer China-based Tsingshan Holdings, which initially faced a hit of $8bn due to a hefty short position. The outgoing LME chair, Gay Huey Evans, had been in the role for three years and had overseen significant changes at the organisation. The fact that she stepped down over this scandal shows the gravity of the situation. The LME plays a crucial role in the functioning of global metals markets and this scandal may have repercussions for the entire industry and other markets.