Nickel trade on the London Metal Exchange (LME) was suspended due to a 'systems error' after prices fell 8.5% during opening trade on Wednesday, having ended a week-long shutdown due to extreme price volatility.
The cost of nickel, a key component in lithium-ion battery cells used in electric vehicles (Evs), soared when Russia, the world's third-largest nickel producer, engaged in a military operation in eastern Ukraine on Feb. 24.
The three-month nickel contract in the LME jumped above $100,000 a metric ton on March 8, more than doubling its last closing price of $48,078 on March 7.
'Following further unprecedented overnight increases in the 3-month nickel price,' the LME said it suspended nickel trading on March 8.
'The LME, in close discussion with the Special Committee, has been monitoring the LME market and the effect of the evolving situation in Russia and Ukraine. It is evident that this has affected the nickel market in particular, and given price moves in Asian hours this morning, the LME has taken this decision on orderly market grounds,' it said.
LME also announced this week that it would install trading limits at 5% above or below the last closing price for nickel. With such a limit in place, the LME reopened the nickel market at 0800 GMT on Wednesday, March 16.
However, the nickel price hit the lower limit of 5%, registering at $43,995 per ton at 0801 GMT.
The closing price of nickel stood at $48,078 a ton on March 7.
- Russia is fourth in reserves, third in production
According to a US Geological Survey, of the more than 95 million tons of nickel reserves in the world, Indonesia and Australia hold reserves of 21 million tons each.
Brazil follows with 16 million tons and Russia with 7.5 million tons.
Holding 8% of global nickel reserves, Russia is also a major producer. Last year, Russia ranked third with 250,000 tons of annual nickel production after Indonesia with 1 million tons and the Philippines with 370,000 tons.
Global nickel production in 2021 is estimated at 2.7 million tons.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr