ROTTERDAM, Netherlands (TND) — Good investors know how to buy but the experts at JP Morgan Chase wound up with a booby prize when they were trying to add nickel bags to the conglomerate's portfolio.
Not that kind of nickel bag, but literally bags of the element nickel. The element is used in steel and electric-vehicle batteries.
There was only supposed to be 54 metric tons of it. That’s not considered a lot. Maybe $1.3 million with today’s prices.
Instead, those bags were full of stones. Yes, rocks. Worth much, much less.
The sale actually happened years ago but apparently, nobody really looked until recently.
Then, Friday, the London Metal Exchange announced a mix-up at a warehouse overseas involving its nickel supply, but it didn’t say where, or whom it involved — just "the invalidation of nine nickel warrants."
It claimed, "In recent months, the LME has been alert to reports of cargo irregularities in the broader physical nickel market.
Therefore, "On the basis of this information, the warehouse operator has promptly undertaken a full check of warranted nickel at this facility.
And the material "has been found to be non-conformant with the contract specifications.
Monday, The Wall Street Journal reported the bags belong to JP Morgan Chase, the warehouse in Rotterdam belongs to Access World, and that company will probably end up taking the financial hit since it was supposed to check the metal and keep it safe.