Aluminium at record high, nickel scales 11-year peak on Russian supply woes

SINGAPORE – Aluminium prices climbed to an all-time high on Thursday, while nickel surged to its highest in 11 years as Russia’s invasion of Ukraine prompted further sanctions on Moscow, raising trader concerns over supplies from the Black Sea region.

Commodity markets extended their bull runs on Thursday, with aluminium, coal and palm oil all hitting new records while crude oil and wheat scaled multi-year highs as Russia’s invasion of Ukraine disrupted global raw material flows.

Three-month aluminium on the London Metal Exchange rose more than 3% to a record high of $3,691.50 a tonne. In Shanghai, the most-traded contract advanced 3.7% to 23,775 yuan ($3,763.65) a tonne.

LME nickel climbed 6.1% to $27,470 a tonne, after hitting its highest since April 2011 at 27,815 a tonne.

“Aluminium and nickel once again led the base metals sector higher as the market braces for disruptions to Russian supply,” said ANZ in a note. “Maersk, which handles shipments for Russian aluminium giant United Co Rusal has suspended operations in Russia.”

Sanctions by Western nations have prompted the world’s three biggest container lines to suspend cargo shipments to and from Russia at a time when aluminium inventories are low.

The United States is preparing a sanctions package targeting more Russian oligarchs as well as their companies and assets, two sources familiar with the matter said on Wednesday, as Washington steps up pressure on Russian President Vladimir Putin.

Stocks of aluminium in LME-registered warehouses have more than halved over the past 12 months to 809,750 tonnes compared with nearly 2 million tonnes in March last year.

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 natural gas used to generate electricity.

Copper rose 2.5% to $10,425 a tonne, after hitting its highest since October earlier in the session at $10,438.50.