The London Metal Exchange (LME) delayed the start of trading in Asia by 90 minutes on Wednesday. The electronic platform opened at 9:30 a.m. Beijing time, instead of the usual 8 a.m. No explanation was given for this change. Traders cited by Bloomberg did not provide any reasons for the delay. This kind of shift in trading schedules at a major exchange like the LME is unusual, and no details have been shared to explain the situation. The LME’s decision to delay trading in Asia is a serious warning for traders. Exchanges typically don’t halt their platforms without a good reason, possibly linked to a big player facing a margin call. This shouldn’t be seen as a minor glitch, but rather as a sign of potential stress in the metals market. We all remember the LME nickel crisis in March 2022 when a huge short squeeze led to a trading suspension lasting over a week and billions in canceled trades. That event highlighted how one risky position can threaten the whole market’s stability. The current delay feels eerily similar, indicating that a major player might be facing trouble during a volatile period. The market is already tense, with China’s manufacturing PMI for August 2025 dropping to 49.2, which shows a continuing drop in demand. Recent supply disruptions have also reduced LME copper inventories by 15% since July 2025, reaching multi-year lows. This clash of weak demand and tight supply creates the perfect conditions for a big fund to become trapped. In the upcoming weeks, traders should focus on risk management and think about buying protection. Purchasing puts on major mining ETFs like the XME or on individual commodity producers could help mitigate counterparty risk. Implied volatility is likely to rise, so it’s important to keep an eye on indexes like the CBOE Volatility Index, which has already increased by 12% in the last five trading sessions. This issue goes beyond metals; it also involves counterparty and credit risk throughout the financial system. A major default at a large commodity trading house or fund could have ripple effects, much like the Lehman Brothers collapse in 2008 that spread from one area to many. We need to be aware of our counterparties and remain cautious about the possibility of a sudden liquidity crisis.

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