Posted on 23 Dec 2022
London-based Global Commodities Holdings (GCH) said Thursday it will start a spot trading platform for physical delivery of nickel in Q1 2023, Kallanish reports.
The platform will enable member companies to trade Class I nickel products on a cif basis across a number of global locations. Trading will open during the Singapore morning and close at 6pm UK time. This will be underpinned by GCH’s specially commissioned Standard Metal Trading Agreement and will be for standardised qualities and shapes of nickel.
GCH says its new offering will help improve accuracy in nickel price discovery for the spot market. That’s because a spot index for Class I nickel will be fed by actual transaction data and qualified bids and offers on the platform, as opposed to mostly based on futures such as those traded on the LME.
“There is a dislocation in the price discovery process for spot nickel, with the weight of futures transactions being too heavy for the existing settlement process,” says GCH ceo Martin Abbott. “There is a very strong argument for separating spot price discovery from futures market activity, allowing both functions to thrive. GCH does not operate in the futures space, but does have valuable experience in providing a market-derived spot price that can be used in physical contracts and for the settlement of other products."
GCH’s spot physical trading and index calculation experience comes through its subsidiary globalCOAL, on thermal coal. The new nickel index calculation will be restricted to briquettes and full plate cathodes. Calculation of the daily settlement price will be derived exclusively from orders and trades on the physical trading screen that comply with the methodology criteria, including a minimum transaction size of 20 tonnes.
GCH trading venues sit on the Trayport trading platform infrastructure.
Source:Kallanish
