By Pratima Desai, Zandi Shabalala and Eric Onstad

LONDON (Reuters) -The London Metal Exchange (LME) halted nickel trading on its electronic system shortly after it reopened on Wednesday after technical issues allowed a small number of trades to be executed below the new daily price limit.

The nickel market was suspended on March 8 after China's Tsingshan Holding Group bought large amounts of nickel to reverse bets on lower prices, propelling the metal up more than 50% to above $100,000 a tonne, sources have said.

To prevent any disorderly trading when the market resumed on Wednesday, the LME installed trading limits at 5% above or below the last closing price before the suspension.

"As the market opened (the electronic system) discovered an opening price of $45,590 ... for 3-month Nickel," the LME said in a members notice. "Unfortunately due to a systems error, LMEselect then allowed a small number of trades to be executed below this lower daily price limit."

The exchange said all nickel trades executed on LMEselect, its electronic trading system, at the lower daily price limit would remain but those below would be cancelled.

Besides suspending nickel trading for only the second time in its 145-year history, the LME also cancelled all trades on March 8 and extended deadlines for those with obligations to deliver physical metal against its contracts.

The price of nickel, which is used to make stainless steel and is a key material for electric vehicle batteries, had been rising steadily even before the conflict in Ukraine ramped prices up even further.

Russia accounts for about 10% of global nickel output and traders were concerned supplies could be constrained by Western sanctions on Moscow.

Nickel trading on the Shanghai futures exchange has continued while the LME contract has been suspended. It was trading at around the equivalent of $34,041 a tonne ahead of the LME opening on March 16.

"The nickel market has been tight for a while and prices have been rising this year," one metals trader said. "The Russia-Ukraine crisis gave it that extra momentum."

One of the main reasons nickel trading had resumed trading is that Tsingshan has reached an agreement with a consortium of banks this week under which they will not make margin calls on, or close out, its nickel positions on the exchange.

"The LME notes ... that a large client of the market has now published details relating to the support of a banking consortium, which could suggest that the potential for further disorderly conditions may be mitigated," the exchange said.

The LME, the world's oldest and largest market for industrial metals, is owned by Hong Kong Exchanges and Clearing Ltd.