Aluminum skyrocketed to record highs in London while nickel surged to the highest in over a decade, as the Ukraine crisis deepened and added to an already chaotic supply chain.
Aluminum jumped up to 4.8% to $3,449 a ton on the London Metal Exchange, while nickel rose to the highest level since 2011. Copper dropped in price, as military action sparked a selloff in risk assets across financial markets.
The higher prices will increase inflationary pressure for buyers that use aluminum. It will affect everything from cars and cables to soda cans. The threat of disruption will greatly impact manufacturers in Europe who buy large amounts of aluminum specialist products that come from Russia.
U.S. President Joe Biden warned Russia faced "severe sanctions" after Vladimir Putin ordered a military attack on Ukraine. These sanctions could affect Russian supplies of aluminum and other commodities.
Disruptions to the country’s natural gas exports also could lower aluminum production by raising energy costs at European smelters. European power prices already rose 15% and the region's benchmark gas contract spiked 41%.
It’s unknown how the situation in Ukraine, or any planned sanctions by the U.S. or Europe, will affect aluminum or any other metal. What is known is that Russia is an important producer of nickel, palladium and copper.
Originally posted on Auto Dealer Today
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