Intervention by the London Metal Exchange to keep the nickel market orderly as inventories dwindled closer to zero did what it was supposed to do, but the situation is still being closely monitored, outgoing LME Chief Executive Simon Heale said Monday.

"The imposition of a limit to the restrictions are still in place but it is important to emphasize that they did what they were supposed to do. The market remained calm," Heale said.

In August, the LME stepped in to calm the nickel market, imposing a $300 a metric ton limit on the daily backwardation, which had soared out to $1,000/ton as shorts rolled their delivery dates forward from a day to two days. Offsetting longs received $300/ton compensation.

"The Special Committee continues to monitor the situation and will make appropriate decisions when it feels such action is sensible," Heale said.

Speaking at the London Metal Exchange metals seminar in London, Heale said the decision was taken at a time of "genuine material shortage in order to avoid the market becoming disorderly."

"LME contracts have continued to settle and deliveries of nickel both into and out of the warehouses have continued without any interruption throughout this time," he added.