Nickel price severely crashed on Tuesday, March 15, and this led to halting its trading on the London Metal Exchange. The price of the metal doubled to $100,000 per ton in a couple of minutes. Measures like stop wild swings and price limits were exercised.
The restart nickel fell again within seconds to about 5 percent daily limit. The metal is mostly used in making steel and batteries for electric cars.
About 200 lots were traded on the day and most trades were priced at $45,590 and this was about half the price of the previous week.
LME stated the halt was implemented to investigate the issue. It is learned the phenomenon was due to the Chinese steel group Xiang Guangda as it struggled in meeting demands for additional cash on a short bet and this resulted in backfiring.
Spokeswoman Bianca Blake said after the trading reopened it moved to a limit-down pricing band and hence the electronic market has been halted to investigate any issue.
Lately, the price of nickel has again dropped by 15 percent on the 145-year-old exchange and this was a new limit down. The price on March 21 was $31,380 per metric ton.
The Russia-Ukraine war has led to supply fears of commodities and this further led to a jump in the prices. Russia is one of the leading producers of grains and metals in the world. It is simultaneously the third-largest nickel producer in the world.
The prices of nickel jumped over 2x on March 8 in just a couple of hours. It crossed the mark of $100,000 per metric ton.
Meanwhile, the prices of aluminum have jumped over 5 percent on March 21 amid Australia's ban on exports to Russia due to sanctions by Western allies.
The Russian invasion of Ukraine started on February 24 and the war has now entered into the fourth week. The Western allies have imposed several sanctions on Russia including a ban on imports of oil and gas as well as removing the Russian banks from international SWIFT payment systems.
Oil prices have jumped up more than $4 and Brent crude is now priced at $111 a barrel. Similarly, the Brent crude futures rose by 4.1 percent to $4.44 and it is traded at $112.37 a barrel.
Experts believe the oil ban may hit hard the European countries as theyare over-dependenton Russia. Russia has warned to be closing its gas pipeline if the EU sanctions on it continue.
Most EU countries relies on Russia for their gas and this is the reason the bloc is divided on the energy issue.