LONDON - The London Metal Exchange (LME) halted nickel trading on Tuesday after prices doubled to a record $100 000/t, fuelled by a race to cover short positions after Western sanctions threatened supply from major producer Russia.
The rare move underscores the market panic created by Russia's invasion of Ukraine with buyers scrambling for the metal crucial for making stainless steel and electric vehicle batteries.
"The LME has taken this decision on orderly market grounds," said the LME, one of the world’s top commodity exchanges, adding it was considering a closure of several days.
"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."
Three-month nickel on the LME more than doubled on Tuesday to $101 365/t before the LME halted trade on its electronic systems and in the open outcry ring.
The uncertainty caused by Russia's invasion and resulting sanctions has added to an already bullish nickel market due to low inventories.
Nickel prices have quadrupled over the past week on fears of further curbs on supply.
Russia not only supplies about 10% of the world's nickel but Russia's Nornickel is the world's biggest supplier of battery-grade nickel at 15% to 20% of global supply, said JPMorgan analyst Dominic O'Kane.