London aluminium surged to a record high on Monday after Western countries ratcheted up sanctions on Russia for its invasion of Ukraine, including blocking some banks from the SWIFT global payments system, raising fears of supply disruptions.
Russia produces about 6% of the world’s aluminium and accounts for about 7% of global nickel mine supplies. It is also a major producer of gas used to generate electricity, a key component of aluminium production.
Three-month aluminium on the London Metal Exchange hit a record of $3,492.50 a tonne earlier in the session, and was up 3.5% at $3,474, as of 0540 GMT. LME nickel was up 1.7% at $24,775 a tonne, after having gained 3% earlier in the session.
“It seems that Russia is prioritising its strategic interests over economic sanctions, so the situation runs further risks of escalation and the uncertainty on supplies disruption will continue to underpin prices for these commodities,” said Yeap Jun Rong, market strategist at IG in Singapore.
“This comes at a time where economic reopening are also driving demand, potentially elevating the demand-supply imbalance,” he added.
Aluminium surges to record high
Russian exports of all commodities from oil and metals to grains will be severely disrupted by fresh Western sanctions, dealing a blow to Russia’s economy and hurting the West with a spike in prices and inflation, traders and analysts said.
Russian President Vladimir Putin put the country’s nuclear deterrent on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two.
Fundamentals
LME copper rose 0.4% to $9,908 a tonne, lead edged 0.2% higher to $2,374, zinc gained 1.1% to $3,660.5 and tin was 1.2% higher at $45,000.
The most-traded April copper contract on the Shanghai Futures Exchange eased 0.1% to 70,940 yuan ($11,241.05) a tonne.
ShFE aluminium dipped 0.4% to 22,740 yuan a tonne, nickel fell 0.4% to 177,020 yuan, zinc rose 1% to 25,030 yuan, lead was flat at 15,570 yuan and tin dipped 0.2% to 337,970 yuan.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange were at 159,023 tonnes on Friday, up 16.7% from the week before.
Societe Generale SA and Credit Suisse Group AG have halted the finance of commodities trading from Russia, Bloomberg News reported on Sunday, citing people familiar with the matter.
Source: Brecorder
