JPMorgan Chase mistakenly buys bags of nickel after warehouse mix-up

According to a new report, JPMorgan Chase mistakenly purchased bags of stones that were thought to be nickel after a mix-up at a Dutch warehouse.

The Wall Street Journal reported on Monday after the London Metal Exchange revealed last week that there had been a mix-up with its nickel supply. It did not identify the owner of the supposed nickel bags or the warehouse where they were kept.

An operator at the warehouse weighed the bags thought to contain more than 50 metric tons of nickel, only to discover that they were filled with stones. People familiar with the matter told The Journal that the warehouse was owned and operated by Access World, which will likely be responsible for the bill. Access World is owned by the miner and trader Glencore PLC.

Access World believes that the issue is an isolated case and specific to one warehouse in Rotterdam and that it is inspected warranted bags of nickel briquettes at all locations. If the material were nickel, an essential element used in steel and electric-vehicle batteries, the bags would have been worth about $1.3 million, or 0.14% of nickel inventories, Bloomberg reported.

The mix-up will have a little impact on metal markets, even though the low quantity indicates that it won't have an impact on metal markets. The incident underscores the complexities of investing in a scandal-ridden industry that is subject to extreme price volatility and supply chain disruptions.

JPMorgan Chase has reported to have purchased the bags years ago.