LME halts nickel trading after unprecedented 250pc price spike

London | The London Metal Exchange halted trading in its nickel market after an unprecedented price spike left brokers struggling to pay margin calls against deeply unprofitable short positions.

Nickel spiked briefly above $US100,000 a ton on the exchange amid a short squeeze that’s embroiled a major Chinese bank and encouraged rule changes from one of the world’s top commodity exchanges.

The material used in stainless steel and electric-vehicle batteries surged as much as 111 per cent to $US101,365 a ton after closing up 66 per cent the day before. It pared gains to be up 74 per cent at $US83,500 a ton as of 3:10 p.m. in Shanghai.

The market on the LME is in the grip of a massive squeeze in which holders of substantial short positions are being forced to cover at a time of low liquidity. To give a sense of nickel’s dizzying surge, it has risen around $US11,000 a ton over the last five years. This week alone, it’s jumped by as much as $US72,000.