(Bloomberg) -- The London Metal Exchange hasn’t found any more problems with bagged nickel in its warehouse network following the discovery last week that the “nickel” underlying nine contracts was in fact bags of stones.

Warehouse operators registered in the LME network have inspected all their inventories of bagged nickel without discovering any more issues, the exchange said in a statement. The LME said it’s continuing to investigate what happened at the Rotterdam warehouse where the problematic bags were stored, but that it’s confident that the current procedures for checking metal when it enters a warehouse are “robust in identifying potential irregularities.” 

The LME also said it’s still on track to resume trading in its nickel contract during the Asian daytime from Monday. The nickel market has been operating under shortened hours for over a year, since the massive short squeeze that led the LME to suspend trading for a week and cancel billions of dollars of trades.

Last week’s revelation dealt another blow to confidence in the embattled exchange, which has had to deal with lawsuits, regulatory investigations and a sharp reduction in trading activity following last year’s crisis.

While only a small number of cargoes were affected at one warehouse in Rotterdam, the incident sparked considerable alarm as the LME’s warehouse network has long been viewed as safe while fraud and theft has proliferated in the broader metals industry. The issue came to light after traders including Trafigura Group discovered issues with metal that they had withdrawn from the Rotterdam facility, which is run by Access World.

LME nickel prices fell sharply as trading began on Monday, and have remained under pressure this week even as other metals climbed amid efforts by authorities to stem the recent banking crisis.

Spot nickel contracts have also been trading at increasingly large discounts to futures, in a condition known as contango that typically signals weak demand for metal in the LME’s warehouse network. 

The spread between cash and three-month contracts widened to $250 a ton on Thursday after earlier trading at $333, while a key one-day spread between spot contracts blew out to a $50 discount, the widest since 2007. 

The spreads — which traded at massive premiums during last year’s squeeze — have come under pressure as supply increased and higher financing costs put strain on stockholders. Illiquid trading conditions have also contributed to several extreme moves in the spreads in recent months.

(Updates with background and nickel spreads)

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