RIYADH: Nickel trading was temporarily suspended from the London Metal Exchange on Tuesday as the commodity reached record highs.

The suspension resulted from many brokers being unable to pay margin calls against unprofitable short positions, as prices spiked above $100,000 per ton.

Three-month nickel was up 66 percent at $80,000 a ton when trading was stopped, having earlier jumped almost 111 percent to a record $101,365.

The frantic move occurred as industrial users and investors rushed to buy back metal contracts. Meanwhile, brokers scrambled to collect margin payments to cover deeply unprofitable positions.

Prices of nickel surged after Western sanctions threatened supply from major nickel producer Russia for its invasion of Ukraine. 

Russia supplies about 10 percent of the world’s nickel while Russian mining giant Nornickel is the world’s top supplier of battery-grade nickel, providing between 15-20 percent of global supply.

“The current events are unprecedented,” the LME said in a notice to members. “The suspension of the nickel market has created a number of issues for market participants which need to be addressed.”

China’s Shanghai Futures Exchange reacted to the rise by saying it will take measures to account for market conditions, but it did not give further details.

Nickel prices on the Shanghai exchange had jumped to hit their upward limit in night trading on Tuesday at a record 267,700 yuan ($42,380.39) per ton. They had also reached a limit up of 15 percent in early trade on Tuesday.

The metals buying frenzy whipped prices higher in early trading, with zinc prices jumping as much as 18.4 percent to a record $4,896 a ton, while lead rose as high as 9.4 percent and tin hit a record $51,000.

“This market is absolutely insane,” said ING analyst Wenyu Yao. “The fundamentals alone won’t be able to explain these prices.”

By midday prices moderated, zinc was up 1.2 percent at $4,159, lead rose 3.8 percent to $2,541, tin climbed 2.7 percent to $47,975 and copper was steady at $10,286.

Aluminum sank 5.5 percent to $3,533 per ton after hitting a record  $4,0734.50 in the previous session.