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Copper prices plummet in seconds on Select order

February 09, 2012 - 10:45 GMT Location: London

KEYWORDS: copper prices , nickel prices , LME , Select , anomaly

Copper prices plunged 1.5% in a matter of seconds on the London Metal Exchange overnight, following an order for the sale of 1,200 lots of the red metal on Select, the exchange’s electronic trading platform.

The order, which went in at about 3.14 GMT, caused copper prices to plummet from $8,625 per tonne, to $8,497 in the space of only a few seconds, according to data seen by Metal Bulletin. Prices then began moving in $70 increments over the course of about 15 seconds, and, at one stage, the price dropped from $8605 to $8,520 in just a second. The effect was mirrored in nickel, where prices dropped from $21,945 per tonne, to $21,350 per tonne in a second. “There...

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Copper

May 24, 2012 17:28 Pan American Silver’s revenues up 20% in Q1
May 24, 2012 17:07 CLOSE TO CLOSE: Base metals follow euro higher in LME kerb
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May 24, 2012 13:48 Base metal prices stable in LME officials as euro plateaus

Nickel & Tin

May 24, 2012 17:07 CLOSE TO CLOSE: Base metals follow euro higher in LME kerb
May 24, 2012 13:48 Base metal prices stable in LME officials as euro plateaus
May 24, 2012 10:15 Base metals prices fall in LME pre-market in the wake of listing eurozone
May 24, 2012 05:50 Trafigura will move to Singapore this year
May 24, 2012 03:57 LME ASIAN WRAP: Copper prices see small lift from US data

Comment & analysis

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Seven days is a long time in the investment world, but last week must have felt longer than most.
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BHP Billiton is one of the poster children for the commodities super-cycle: a mining company whose immense upstream assets in copper and iron ore have fed the industrialisation of China since the early years of the 21st century and enabled it to return $52 billion to shareholders between 2001 and 2011.
LORD COPPER: There is nothing to fear after JP Morgan loss ...

So, here we go again. Another bank, another huge trade gone bad. This one doesn’t even appear to have been a case of rogue trading; a whole desk seems to have been operating with the full knowledge of the management and/or risk committee.