The London Metal Exchange said it doesn’t expect the nickel market will reopen before March 11, after trading was suspended Tuesday following an unprecedented surge in prices.

The exchange stressed that it was not announcing a firm date “given the uncertainties in the broader market,” and laid out a series of steps it’s planning to ensure order in the market after the restart. It expects to open trading in European hours only to begin with, set a daily 10 per cent limit on price moves, and is exploring whether it can voluntarily reduce the number of outstanding short positions prior to reopening to ease the upward pressure on prices.  

Collectively, the measures mark another historic shift in the LME’s approach to managing its markets, which are designed as a last resort for both buyers who are facing scarcity, and sellers who have surplus metal to offload.

Earlier, it canceled trades that took place after midnight on Monday, when prices rose from around US$50,000 a ton to over US$100,000, as brokers and short-position holders faced spiralling losses. It also said it would calculate margin requirements based on Monday’s closing price.

A Chinese tycoon who built a massive short position in the market is facing billions of dollars in mark-to-market losses as a result of the surge in prices, according to people familiar with the matter.  A unit of China Construction Bank Corp., which is one of Tsingshan’s brokers, was given additional time by the LME to pay hundreds of millions of dollars of margin calls it missed Monday. The necessary payment has now been made, a person familiar with the matter said Tuesday.

In its update late on Tuesday, the exchange said that all of its clearing members had met their margin requirements in full. Still, the bourse said it “understands that credit conditions in the broader commodities markets have been placed under stress due to geopolitical events and rising prices.”