A technical failure at CME Group on Wednesday led to a trading halt in its natural gas and metals futures markets for over half an hour. This marks another systemic disruption for CME, following an abnormal trading suspension in benchmark natural gas futures a month ago. The timing was particularly sensitive, coinciding with the expiration date of the March natural gas futures contract, amplifying market impact.
At 12:15 North American time on February 25, CME announced the suspension of trading for metals and natural gas futures and options on its Globex platform. Approximately 25 minutes later, restart schedules were released: natural gas futures trading resumed at 12:50, while metals futures trading was delayed until 13:45. CME also stated that all day orders and Good-Till-Date (GTD) orders marked for that day would be canceled; only confirmed Good-Till-Canceled (GTC) orders would remain active.
Following the outage, Bloomberg data showed trading data for COMEX gold, silver, and copper futures, as well as NYMEX natural gas futures, was missing starting from 02:00 Beijing time on February 26. Natural gas futures resumed trading after 03:00 Beijing time, with gains quickly expanding to over 3% and hitting a new intraday high of $3.017.
Nicky Shiels, head of metals strategy at MKS PAMP SA, commented that a "freeze" occurring just before market close was "extremely poor timing," affecting all participants who use futures for pricing and hedging.
A timeline of system alerts from CME's website details the incident response. At 12:11 Central Time on the 25th, CME's Global Command Center (GCC) issued an alert acknowledging a technical issue affecting metals and natural gas futures and options and initiating an investigation. Four minutes later, at 12:15, CME formally announced the trading halt for those markets. By 12:33, an operational notice outlined the order handling procedures before market restart. At 12:40, CME provided the specific restart time for natural gas futures, with a separate notice following for metals futures, which opened about 55 minutes later. CME did not specify the exact cause of the technical failure.
This incident is the second trading halt for CME's natural gas futures market in about a month. Reports indicate that on January 27, during a record price surge, NYMEX, part of CME, implemented an anomalous two-minute trading halt at market close, leading to discrepancies in settlement prices and confusing traders already tense due to demand volatility from cold weather. Two disruptions within a month have significantly heightened market focus on the stability of CME's trading systems. Nicky Shiels' remarks reflect widespread concern that any infrastructure failure during critical price discovery windows can substantially impact institutional investors relying on futures for pricing and risk management.
Comments