Prices for six key metals jumped in the run-up to Russia's Feb. 24 invasion of Ukraine. Most have settled back to pre-invasion levels, but palladium and aluminum prices have remained elevated, according to S&P Global Market Intelligence data.
The conflict has rattled metal markets fearing a potential supply crunch caused by disruptions and sanctions against Moscow.
Aluminum prices on the London Metal Exchange climbed to $3,435.00 per tonne on Feb. 24, from $3,321.00/t a day prior. Prices fell to $3,386.50/t on Feb. 25 and rebounded to $3,388.00/t on Feb. 28.
Russia-based UC Rusal IPJSC, a top aluminum producer, suspended production at its Nikolaev alumina refinery in Ukraine due to logistical challenges linked to the conflict.
LME nickel prices also rose to $25,233.00/t on Feb. 24, from $24,887.00/t on the previous day. They fell to $24,838.00/t on Feb. 25 and further dropped to $24,661.00/t on Feb. 28. Arctic-focused Russian mining giant PJSC Mining and Metallurgical Co. Norilsk Nickel is a major producer of the metal.
Both supplies of aluminum and nickel are currently tight and any supply reduction may drive prices higher, Credit Suisse said in a Feb. 22 note.
Iron ore prices on the New York Mercantile Exchange slightly declined to $142.66/t on Feb. 24, from $142.96/t on Feb. 23. Prices further fell to $141.76/t on Feb. 25, before rising to $141.99/t on Feb. 28.
Ukraine-focused iron ore pellet producer Ferrexpo PLC declared force majeure amid the conflict, while the EU has sanctioned Alisher Usmanov, founder of Moscow-based iron ore miner AO Holding Co. Metalloinvest. Vale SA's Executive Vice President of Iron Ore Marcello Spinelli said the crisis has exacerbated a shortage in iron ore supply.
Palladium prices on the London Bullion Market Association, or LBMA, jumped to $2,680.00 per ounce on Feb. 24, from $2,423.00/oz on Feb. 23. It dropped to $2,320.00/oz on Feb. 25, but it rallied to $2,509.00/oz on Feb. 28. Russia accounted for 43% of the global palladium production in 2020. Norilsk Nickel is also a top producer of the precious metal.
LBMA silver prices increased to $25.32/oz on Feb. 24, from $24.11/oz a day prior. It fell to $24.21/oz on Feb. 25, standing at $24.35/oz on Feb. 28.
LBMA gold bullion prices grew to $1,925.00/oz on Feb. 24, from $1,906.95 on the previous day. It dropped to $1,887.30/oz on Feb. 25, but rose to $1,903.75/oz on Feb. 28.
Russia-headquartered gold miner Polymetal International PLC said the geopolitical tensions may require a lot of management efforts to maintain company performance and flagged that sanctions on the company remained unlikely.
Toronto-based gold miner Kinross Gold Corp. suspended its Udinsk and Kupol gold operations in Russia after it earlier said its Russian mines had been unaffected by sanctions.
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