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According to Reuters, the London Metal Exchange was forced to suspend trading in nickel futures after a panicky rise in its price quotes. On Tuesday morning, March 8, the price of nickel briefly reached sky-high $101,365 per ton compared to $30,000 per ton on Friday, March 4. Trades were stopped at $80,000 per ton at 8:15 London time (11:15 Moscow time).
The last time trading in a nickel contract stopped was on the LME in 1988, after the spot price of nickel rose 50% in a 5 minute trading session.
Meanwhile, the broker Marex Spectron notes that the rally is not due to demand or the activity of investment funds, but to the painful factor of the so-called margin calls - the requirements of brokers to deposit additional funds into accounts when the value of their assets drops to a certain amount, with forced liquidation of positions and buyback of assets .
The sources also say that China's Tsingshan Holding Group has bought significant amounts of nickel to reduce the risks for its bear traders during a period of financial turbulence, adding fuel to the rally that arose in response to the military actions in Ukraine.
As of March 4, the stocks of nickel in LME warehouses amounted to 36.654 thousand tons. According to experts, with such low stocks of the metal, it will be extremely difficult for any "bear" to supply physical metal, which makes the market very vulnerable to price surges.
