24 Feb 2022 | 10:40 UTC

Nickel, copper, other key non-ferrous metals jump amid Russia's invasion of Ukraine

Highlights

Fears mount that more sanctions could tighten supplies

Aluminum price reaches record high

Prices for key non-ferrous metals rose around 5% in early London trading Feb. 24 as concerns heightened of a curtailment in supplies of some metals following news of Russia's invasion of Ukraine.

Russia is a major producer of metals including aluminum and nickel and is also a substantial copper producer. Market sources believe the near-certainty that stricter sanctions will be introduced on trade with Russia could further squeeze supplies in global markets that are already tight, with deficits in some cases.

European Commission President Ursula von der Leyen announced in a press statement later on Feb. 24 that the EC "will present a package of massive and targeted sanctions, to European Leaders for approval."

The London Metal Exchange three-months spot nickel price was trading at $25,315/mt at 0938 GMT Feb. 24, against the closing price of $24,396/mt on Feb. 23. With the increase, nickel posted a new multi-year high of just short of $25,400/mt.

The LME three-months spot copper price was trading at $9,954/mt ($4.52/lb) at 0938 GMT Feb. 24, against the closing price of $9,866/mt on Feb. 23.

The LME three-months spot aluminum price surged by almost 5% to a record high of $3,450/mt.

"Heightened volatility on the escalation of the conflict shows markets had not fully priced in the likelihood of deeper conflict," said Mark Haefele, chief investment officer, UBS Global Wealth Management, on markets' reaction to the invasion. "We expect continued volatility in the near term as leaders calibrate and announce their response to this escalation."

Gold and palladium

In precious metals, analysts expect gold prices will break through $2,000/oz should conflict further escalate, with prices in early Feb. 24 trading at $1,954/oz, the highest level in over a year as investors seek "safe haven" assets.

The palladium price, which already gained by around 5% on Feb. 23, continued to rise early on Feb. 24, reaching almost $2,600/oz, its highest level in more than six months.