Shanghai Futures Exchange, China’s top commodity bourse, has paused nickel trading after prices hit their upper limit, a day after a similar surge prompted the London Metal Exchange to take similar action, Bloomberg News reported on Wednesday.
What Happened: Nickel prices rose 17% on the SHFE on Wednesday, breaching their daily limit of 267,700 yuan ($42,373), implying further trades were suspended for the day unless transactions ended below that price.
Commodity futures are subject to caps in China.
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Sharp Price Surge: Nickel prices stormed higher earlier this week following supply concerns due to the Russia-Ukraine war, rocketing as much as 250% in two days on the LME.
Nickel prices rose to more than $100,000 per tonne on the LME after China's Tsingshan Holding Group reportedly held a short position in the metal that is a key ingredient to make electric vehicle batteries.
Tesla Inc (NASDAQ: TSLA), General Motors Co (NYSE: GM), Ford Motor Co (NYSE: F), and other EV makers use nickel to make the batteries.
The LME said it would cancel all trades that took place hours before the halt, and trading is unlikely to resume before Friday, according to the report.
LME doesn’t usually impose limits on intraday trading but plans to cap nickel’s moves at 10% when trading resumes.
