The London Metal Exchange (LME) found sacks of stones instead of nickel in a warehouse in Rotterdam. Prior to this, LME had learned that part of the cargo delivered from the warehouse in Rotterdam contained bags of stones instead of nickel briquettes. Agency Bloomberg reports that the warehouse is managed by Access World. The company was formerly owned by Glencore Plc and was reported to have been acquired by Global Capital Merchants Ltd in January.
Access World investigated and found that bags of "nickel" were part of nine contracts (54 tons of metal). Nine warehouse orders were invalidated and their owner notified, the LME said, without naming it. The metal has been registered in the LME warehouse since early 2022, one of the sources said.
Representatives for Access World and Glencore declined to comment.
The LME system is considered more secure as the exchange creates its own warehouse orders and digitally transfers ownership of them. Warehouse companies check the goods as they arrive, including by weighing the bags.
However, the LME stated that the bags were clearly not of the expected weight, suggesting that the warehouse had not weighed the ones sent out. The LME said there was no reason to believe other warehouses were affected, but the exchange asked licensed operators to double-check the guaranteed nickel.
In February, it became known that a metal seller from India defrauded one of the largest traders in the world for $0.5 billion. Trafigura Group discovered the fraud. A random check revealed that there was no nickel in the containers with nickel: the supplier loaded a cheaper raw material - ordinary steel. As a result, the trader's losses amounted to almost $600 million.
According to Bloomberg, nickel is most often involved in fraudulent schemes. This is an expensive material (according to data at the end of February, a ton on the London Stock Exchange cost more than $27,000), while traffic control is rather weak due to the large volumes of its sales.
Read more in the publication "b FM" "Steel pretended to be nickel".