Members Area
T: +44 (0)114 551 8170
E: ssas@bssa.org.uk

LME nickel more than doubles, tops $100,000/T on Russia supply risks

By

Three-month nickel on the London Metal Exchange soared 71% to $82,250 a tonne by 0755 GMT. Earlier in the session, the prices shot up nearly 111%, to a record $101,365.

Russia supplies the world with about 10% of its nickel needs, mainly for use in stainless steel and electric vehicle batteries.

“As sanctions against the Russians got rolled out last week with unprecedented speed, investors found themselves stripping away all Russian output from their supply and demand projections and marking up prices accordingly,” ED&F Man Capital Markets analyst Edward Meir said in a note.

Logistics disruptions have also roiled commodity markets.

Inventories of nickel in LME-registered warehouses stand at 76,830 tonnes, their lowest since 2019.

“I think the market will cool off… There’s a lot of supply increase coming in 2022,” said Steven Brown, an independent consultant based in Australia.

Prices of other industrial metals also jumped, with benchmark zinc and tin on the LME rising to record highs of $4,896 a tonne and $51,000 a tonne, respectively.

FUNDAMENTALS

* LME copper rose 2.5% to $10,542.5 a tonne, aluminium jumped 3.9% to $3,886, lead gained 8.2% to $2,663, zinc surged 9.1% to $4,486 and tin was 7% higher at $50,000.

* The most-traded April copper contract on the Shanghai Futures Exchange ended daytime trading down 0.5% at 74,000 yuan ($11,716.28) a tonne, having earlier hit a peak since May 2021.

* ShFE aluminium dropped 3% to 23,105 yuan, zinc gained 7% to 28,195 yuan, lead rose 2% to 15,970 yuan and tin climbed 12% to 391,400 yuan. Nickel hit a limit up of 15%, having touched a record high of 228,810 yuan a tonne in early trade.

* China’s Wuxi Stainless Steel Exchange Center has halted trading for nickel products from March 8 pending further notice, and raised trading limits for both stainless steel products and nickel since settlement on March 7.

* The LME is imposing a backwardation limit and delivery deferral mechanism for physically settled base metals contracts with immediate effect, it said on Monday, citing the Russia-Ukraine conflict and tightness in the market.

($1 = 6.3160 Chinese yuan renminbi)