Nickel prices soar as Russia-Ukraine crisis escalates
March 7 (Reuters) – London nickel prices soared as much as 30.7% on Monday, their biggest daily percentage gain on record, as supply disruption fears gripped markets amid an escalating Russia-Ukraine conflict and mounting sanctions against Moscow.
Russia accounts for around 7% of worldwide production of nickel, which is used to make stainless steel and batteries for electric vehicles.
Three-month nickel on the London Metal Exchange was up 25.9% at $36,410 a tonne by 0830 GMT. Earlier in the session, it hit its highest since June 2007 at $37,800.
The most-traded April nickel contract on the Shanghai Futures Exchange ended daytime trading up 12% at a record high of 210,950 yuan ($33,406.18) a tonne.
International inventories of nickel were already low, adding to price spikes which have seen prices of LME nickel rally 76% since the start of this year.
“Nickel was already in tight supply, and if a large supplier is being taken out from the market, it will have a cascading impact in the near- to medium-term,” said Kunal Sawhney, chief executive officer at research firm Kalkine.
“The surge in prices is going to add further pressure on spot supply.”
Premiums for cash nickel over the three-month contract have risen to $690 a tonne, the highest since 2007, indicating tight nearby supplies.
Russia’s invasion of Ukraine has triggered sweeping Western-led sanctions aimed at crippling the Russian economy.
“With heightened uncertainty, potential for higher interest rates and lower consumer spending in a high-cost energy environment, demand for metals may come under pressure,” analysts at RBC said in a note.
Russia produces about 6% of the world’s aluminium and accounts for about 3.5% of copper supplies.
Benchmark aluminium on the LME rose to a record $4,073.50 a tonne and was last up 4.7% at $4,028.