© Reuters. FILE PHOTO: Aluminium ingots are seen outside a warehouse that stores London Metal Exchange stocks in Port Klang Free Zone, outside Kuala Lumpur, March 23, 2015. REUTERS/Olivia Harris/File Photo
(Reuters) – The London Metal Exchange (LME) will require warehouse companies to carry out additional checks on stocks of warranted nickel following irregularities earlier this year, Bloomberg News reported on Friday.
The tests include using magnets and metal detectors, as well as a “touch inspection” which involves warehouse workers feeling the outside of bags to verify that the material inside is of an appropriate size and shape, Bloomberg reported citing people familiar with the matter.
The exchange is also asking warehouses to weigh bags of nickel as they are delivered out of the LME system, Bloomberg reported.
Earlier in March, nickel delivered by LME-approved warehouse firm Access World to commodity traders Trafigura and Stratton Metals turned out to be stone, two sources with knowledge of the matter said.
Later in March, the LME said that no further “irregularities” had been found in LME-warranted nickel stocks following a 100% inspection of all bagged nickel warrants in LME-licensed warehouses.
