Backwardation limit for Nickel

At 1700 hours on 17 August 2006, The London Metal Exchange announced that the Special Committee has imposed a Backwardation limit of USD 300.00 per tonne per day in the nickel market and that there will be a suspension of the Lending Guidance in respect of those with nickel positions. After taking account of all the relevant factors, and following consultation with LCH.Clearnet, the Special Committee has resolved that: 1.Backwardation limit-those with short positions in nickel falling prompt on 18 August 2006, and on subsequent prompt dates until further notice, who are unable to effect physical delivery and/or unable to borrow metal at a backwardation of no more than USD 300.00 per tonne per day, shall be able to defer delivery for a day at a penalty of USD 300.00 per tonne. Those with long positions for prompt on those days who are subject to deferred delivery shall be entitled to compensation of USD 300.00 per tonne per day; and 2.Lending Guidance-the Lending Guidance in respect of nickel shall be suspended with immediate effect such that those with dominant long positions in nickel shall not be obliged to lend in accordance with the Lending Guidance until further notice.
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