$1.3 million (€1.21 million) worth of nickel stored in a warehouse bought through London Metal Exchange (LME), was actually just bags of ordinary rocks.

The mix-up was revealed at a warehouse in the Dutch city of Rotterdam according to The Wall Street Journal, when a warehouse operator inspected bags which were expected to hold over 50 tonnes of nickel.

Had the contents of the bag actually been nickel they would have represented 0.14 per cent of nickel inventories listed on the LME.

The contracts for the supposed bags of nickel belonged to JPMorgan Chase, the world’s largest bank by market capitalisation.

A spokesperson for the warehouse told Business Insider that, “it is currently undertaking inspections of warranted bags of nickel briquettes at all locations and will engage external surveyors to assist. In the meantime based on internal stock checks all information indicates that the underlying issue which led to the suspension of the 9 warrants referenced in LME notice 23/044 is an isolated case and specific to one warehouse in Rotterdam.”

While not to blame, the bank has been under scrutiny for its role in participating in a short-squeeze (when investors invest in a financial instrument, to raise its value significantly, at the expense of investors who had bet against the financial instrument) on nickel in the LME which saw the price of the commodity skyrocket by 250 per cent within 24 hours in 2022.

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