London Metal Exchange Profits Slumped to Lowest in Eight Years in 2022

SEATTLE (Scrap Monster): The profits at the London Metal Exchange (LME) declined sharply to hit the lowest levels in eight years in 2022. The volumes were badly impacted by the nickel crisis and subsequent trading halt in March, said the annual report published by the exchange.

The annual profit of the exchange recorded year-on-year decline by 27% in 2022 to total $56.1 million. This is the lowest level since 2015, when trading volumes had slumped just ahead of a trading fee hike. The dip in profits was mainly on account of lower volumes, coupled with surge in expenses for legal and other professional fees.

RELATED NEWS:

LME Group Unveiled Plans to Strengthen Metals Market

LME Hit by Fresh Lawsuits over Nickel Trading Crisis

The exchange has been facing strong criticism from fund managers ever since the nickel crisis. The exchange has been sued by several hedge funds and trading firms over its decision to suspend the nickel market, which resulted in cancellation of billions of dollars in trades. The financial impacts due to lawsuits are yet to be ascertained. There exists a possibility of other market participants seeking fresh claims.

Meantime, the annual report by LME Clear indicates that its profits dipped by 29% in 2022 to $21.4 million, thereby hitting the lowest level in its history. The expenses towards legal and other professional fees skyrocketed by 592% to $4.5 million during the year.