LONDON – Base metals slumped on Wednesday, including aluminium, despite continued worries about Russian supply, as cautious investors slashed positions in the wake of a halt in trading of skyrocketing nickel.

Many metals saw losses of over 5% while tin tumbled nearly 20%.

Traders had been warning in recent days that the speculative frenzy that pushed up prices dramatically in recent days was in danger of reversing when short-covering evaporated.

The London Metal Exchange intervened on Tuesday to calm the nickel market after prices rocketed in a matter of hours to records of over $100 000 a tonne. It had been trading at about $45 000 a tonne in the runup to the war.

The LME does not anticipate resuming nickel trading before Friday. 

"The market is pausing, trying to take stock of what's going on, and market positions are being adjusted accordingly," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"It highlights the incredible difficulty in navigating these markets right now."

Three-month LME aluminium CMAL3 had slid 4.9% to $3 326 a tonne by 18:15 GMT during a volatile session in which it earlier jumped as much as 5.2%.

"Markets are exiting risk amid high volatility," Al Munro at broker Marex said in a note.

Aluminium has gained nearly a fifth this year due to continued worries about the impact of the invasion of Ukraine by Russia, which accounts for about 6% of global supply of the lightweight metal.

Russia's President Vladimir Putin signed a decree on Tuesday restricting the import and export of goods and raw materials "to ensure the security of the Russian Federation," but specific materials were not identified. 

The conflict and ensuing sanctions have played havoc with global supply chains, sending prices soaring across commodities markets.

Russia supplies nearly 10% of world nickel needs and also is a major producer of natural gas used to generate electricity that powers production of metals such as aluminium and zinc.