Why Putin Blows Up Nickel Prices
Aluminum and nickel prices on the London Metal Exchange rose to highs on Tuesday, fueled by fears of Russia's interruption of supply in an already tense market due to escalating tensions in Ukraine. All the details
The price of nickel is soaring due to geopolitical tensions.
The price of nickel reached $ 25,055 per ton, the highest since 2011, driven by the escalation of the crisis in Ukraine, which could put Russian production under pressure, and by the increase in demand, linked to the boom in electric cars (the metal is used in batteries).
Indeed, Russia is one of the world's largest producers of nickel, aluminum and palladium.
At the moment, at the London Metal Exchange, nickel, which has risen by 18% since the beginning of the year, is changing hands to 24,825 dollars per ton (+ 0.5%). After coming to earn 1.3%, precisely above $ 25,000, reports Radiocor .
The escalation of tensions between Russia and the West , which still does not find a solution despite constant diplomatic efforts, is also having an impact on the aluminum market, of which Russia is the second largest producer in the world. The metal is trading at $ 3,329 per ton, just below the 14-year high reached in early February.
All the details.
WHAT HAPPENS TO THE PRICES OF NICKEL AND ALUMINUM
Nickel price hit $ 25,055 per ton during initial trading on Tuesday, up 2.4% from Monday's closing price of 24,349 per ton, while aluminum hit $ 3,380 per ton, equaling its record high. for 2008 and up 3% from Monday's close of $ 3,279 per tonne price.
"These values burn the estimates of Bank of America, which for nickel had set a target price (upwards) of $ 25,000 only for 2023, while for this year the investment bank had set a target of $ 23,143 ”Reports MF . “The demand for nickel from electric vehicle manufacturers is expected to grow in the coming years. Indonesian supply chains (together with Russia, Indonesia is one of the world's largest producers of nickel) are expected to prevent shortages in the short term, but more material will be required over time. We expect a deficit for 2022 ”, BofA analysts wrote on 10 February.
WEIGHING THE CRISIS IN UKRAINE
"The crisis in Ukraine continues to weigh on metal prices," said Commerzbank analyst Daniel Briesemann.
The price of nickel, a key raw material in stainless steel production, has risen by nearly 20% since the beginning of the year. However, Briesemann warned that aluminum and palladium prices did not rise to the same extent as nickel. "The nickel market still appears to be very tight" with stocks dwindling, Briesemann said.
AND NOT ONLY
“To complicate the context, there is the possible decision by the government of Jakarta to ban exports of the metal to encourage its use in domestic production” reports Milano Finanza .
MARKET FOR THE STRONGEST NICKEL
According to observers, considering that Russia is one of the largest nickel producers, along with Indonesia, exports could slow down.
The United States and European countries had in fact threatened to impose sanctions on Moscow in the event of an invasion of Ukraine. “The demand for nickel is very robust”, which is why “nickel stocks on the London Stock Exchange continue to decline. Currently just under 84,000 tons are stored at the Lme and less than half is available on the market ”, Marex analysts pointed out.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-putin-fa-esplodere-i-prezzi-del-nichel/ on Tue, 22 Feb 2022 14:31:15 +0000.