Economic news

Aluminium and Nickel Climb on Russian Supply Angst

LONDON, Feb 14 (Reuters) - Aluminium and nickel prices headed towards multi-year highs on Monday due to escalating fears that reduced supplies from Russia would exacerbate existing shortages of both industrial metals.

A Russian invasion of Ukraine could mean sanctions against Russian firms which include Norilsk Nickel supplying about 10% of the world's nickel and Rusal, accounting for around 5% of global aluminium supplies.

Russia has repeatedly denied it is preparing to invade Ukraine.

Benchmark aluminium on the London Metal Exchange was up 1% at $3,169 a tonne at 1037 GMT.

Prices of the metal used widely in the power, construction and packaging industries hit $3,333 a tonne last week, close to the record high of $3,380.15 hit in July 2008.

"There's a risk of sanctions on Russia, people are trying to stock up on aluminium and nickel," a metals trader said.

Nickel was up 1.7% at $23,450 a tonne, not far from the 10-year high of $24,435 a tonne hit in January. Nickel is used to make stainless steel and electric vehicle batteries.

STOCKS: Shortages can be seen in dwindling inventories in LME registered warehouses.

Aluminium stocks at 868,950 tonnes have more than halved since March last year. Cancelled warrants -- metal earmarked for delivery -- at 30% suggests more aluminium will be delivered out over coming days and weeks.

Nickel inventories at 84,894 tonnes have dropped 67% since April last year, while cancelled warrants stand at 50%.

SPREADS: Worries about supplies on the LME market have seen cash aluminium and nickel trade at a premium over the three-month contracts for some time.

SHANGHAI: Norilsk Nickel's cathode is deliverable against the nickel contract traded on the Shanghai Futures Exchange (ShFE). The contract too has rallied in recent days.

DOLLAR: Prices of copper used by investors as a gauge of economic health were down 0.7% at $9,787 a tonne.

Worries about demand in top consumer China and a stronger U.S. currency which when it rises makes dollar-priced metals more expensive are weighing on copper.

OTHER METALS: Zinc was down 0.5% at $3,607 a tonne, lead gained 0.3% to $2,285 and tin climbed 0.6% to $43,800.

Reporting by Pratima Desai; editing by Kirsten Donovan

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree