LME halts nickel trading as Ukraine war causes price surge

The London Metal Exchange suspended trading of nickel after the war in Ukraine caused the price to double to more than $100,000 a tonne on Tuesday.

The exchange said it halted trading because the market was disorderly after the "situation in Russia and Ukraine" caused extreme price moves in Asian trading hours.

The three-month nickel contract doubled in Asian trading to briefly hit a record of more than $100,000 a tonne. That move followed a leap of more than 70% on Monday.

Rising prices were exacerbated by a short squeeze as traders sought to cover bets against nickel. The LME gave China Construction Bank extra time to pay margin calls for a client.

"The LME will actively plan for the reopening of the nickel market and will announce the mechanics of this to the market as soon as possible," the exchange said.

Nickel is used in stainless steel and in batteries for electric vehicles. Russia is the biggest producer of high-grade nickel for the car industry and fears triggered by the Ukraine war have sent prices higher.

Turbulence in the nickel market is the latest disruption to commodity prices caused by the war. The price of oil has rocketed and grain prices have surged.

Neil Wilson, chief market analyst at Markets.com, said: "It’s not just oil and gas markets going parabolic. Yesterday saw multiple sigma moves in nickel prices. The LME has suspended trading for at least the remainder of the day. Wheat is higher again, too. European natural gas prices are mooning. This commodity squeeze will lead to margin calls and liquidations; we just don’t know [how] many are hedged the wrong way."