LONDON - The London Metal Exchange (LME) is hiking initial margins by 28% on nickel, which the exchange has targeted for heightened monitoring due to heavy volatility in recent days.
A notice released on Wednesday said the initial margin for nickel would climb to $6,100 a tonne effective after close of business on Friday, from $4,765 previously.
The LME, the world's oldest and largest market for industrial metals, said on Wednesday it would undertake enhanced monitoring of nickel after it fell as much as 12%, having already breached the LME's 15% daily limit on price swings on Monday.
Benchmark three month nickel extended losses on Thursday, slipping an additional 6.2% to $15,840 a tonne by 1420 GMT.
Margins for other metals will also increase, including copper by 6.3% and aluminium by 9.2%.
Margin calls are deposits of cash or collateral with the exchange's clearing house, LME Clear, to cover potential losses if a member defaults.
Members must deposit the initial margin with LME Clear when opening their trades.
The exchange is owned by Hong Kong Exchanges and Clearing Ltd.