Aluminium and copper prices struck record highs in global markets Monday on supply fears linked to Russia’s invasion of Ukraine.
Aluminium reached $4,026.50, the first time the lightweight metal had breached $4,000 per tonne. Copper’s new record stood at $10,845 per tonne.
Commodities have been red hot since Russia’s assault on its neighbour, with gold on Monday back above $2,000 an ounce thanks to the metal’s status as a haven investment.
Also on Monday, nickel prices rocketed by more than 25 percent and oil prices soared close to $140 a barrel, reaching the highest levels in nearly 14 years.
Commodities markets have been roiled by Russia’s invasion of Ukraine as big corporations withdraw from the country, lenders pull back from financing deals and the threat of new sanctions deters buyers.
It’s also getting increasingly difficult to transport commodities like metals, which are shipped in containers. Almost half of the world’s container ships will no longer go to and from Russia, based on announcements by shipping companies as of Tuesday.
Aluminium rose as much as 3.4 percent and nickel as much as 5.6 percent after Shanghai Futures Exchange contracts spiked at the start of their evening session. Zinc surged more than 4 percent on concerns that high energy costs will lead to further smelter curtailments. Russia’s United Co.
At the same time, inventories of materials including aluminium tracked by the London Metal Exchange have dropped to critical levels and slipped further on Wednesday. Supplies are especially tight in Europe, where surging power prices have forced smelters to reduce production.
Spiking premiums in Europe had prompted traders to start shipping metal in break-bulk vessels all the way from warehouses in Malaysia’s Port Klang even before the war broke out.
So far, Norilsk Nickel’s shipments have not been significantly disrupted, according to a person familiar with the matter. While some shipholders have declined to transport its nickel and a shortage of containers is a concern, the effect is not material and buyers are still taking the metal, the person said on Wednesday.
Maersk handles some shipments for aluminium giant United Co. Rusal International PJSC, and the suspension poses a risk to its exports, a person familiar with the matter said earlier in the week.
Metal inventories on the LME continued to shrink on Wednesday — orders for aluminium jumped by 70,700 tons, the most since June, as requests for metal rose in Port Klang. Freely-available nickel stockpiles fell to the lowest since December 2019.
Meanwhile China’s top government officials have issued orders to prioritise energy and commodities supply security, sparked by concerns over disruptions stemming from the war. Russia accounted for nearly 18 percent of China’s imports of refined nickel as of the end of last year, and made up about 12 percent of aluminium shipments.