New sanctions pressure on metal

Following the US and UK’s decision to impose sanctions on Russia, aluminum and nickel prices jumped. Following the US and UK’s announcement of sanctions on Russian-made metals used in industry, aluminum recorded a record daily increase on the London Metal Exchange. Aluminum rose by 9.4 percent, the fastest rate since the current contract type was first traded in 1987. Nickel rose by 8.8 percent due to concerns about supply chain disruption, while prices in copper, a more liquid market, remained flat. Russia provides 6 percent of global nickel, 5 percent of aluminum and 4 percent of copper production in metals that are important for industry. Jia Zheng, Research Director at Shanghai Dongwu Jiuying Investment Management, said the immediate price movement was fueled by “concerns that sanctions will reduce Russia’s flow to Western markets.” The sanctions announced last week aim to reduce Russia’s war-making capacity. While the sanctions are not expected to halt Russian metal trade, supply chain concerns are increasing uncertainty in commodity markets.