LONDON (AP) — Nickel trading in London was suspended on Wednesday shortly after it resumed after a week off while the exchange was investigating an issue.

The London Metal Exchange said it had to halt trading to investigate a “system error” that dropped the price below a lower daily limit.

The exchange has introduced daily price limits to reduce volatility as part of efforts to revive trading for the nickel contract, which was first suspended last week when the price soared to over $100,000 per ton.

The exchange said it “allows a small number of trades” to be made below the lower price limit. He pledged to reopen trade “as soon as possible”.

Nickel is mainly used to produce stainless steel and some alloys, but it is increasingly used in batteries, especially for electric vehicles. The going rate for the metal is also often used as a benchmark for evaluating other materials used in the creation of industrial compounds such as nickel sulfate, which is used in coatings, textiles, and other industries.

The LME’s decision to suspend trading in the metal on March 8 resulted in “lack of price discovery of this crucial benchmark, which in turn has stalled trading activity for the entire materials supply chain. battery,” Rystad Energy analysts wrote in a research note. this week.

The disruption in trading obscures how much the market is willing to pay for the metal. This prompted most nickel sulfate producers in China to stop offering their products, analysts noted.

Nickel trading was thrown into turmoil last week when a big bet by Chinese metals giant Tsingshan Holding Group went wrong. Tsingshan was betting nickel prices would crash, but instead staged an unprecedented rally amid severe economic sanctions against Russiaa major global metal producer, following its invasion of Ukraine.

The big fear was that Tsingshan would struggle to make margin calls with its bankers, potentially facing billions of dollars in losses. In a margin call, a broker tells a client to put money in after borrowing money to trade.

Tsingshan said this week he had reached an agreement with creditors not to make margin calls or close positions against the company while it resolves the issue.

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