Nickel rose to $25,000 a ton for the first time since 2011, extending a rally driven by dwindling global inventories and concerns that Ukraine tensions could disrupt supplies from key producer Russia.
The metal, used in stainless steel and rechargeable batteries, advanced as much as 3.2% to $25,135 a ton. It’s the top performer on the London Metal Exchange this year, climbing amid a wave of forecasts that supply will fall short of rapidly growing demand from the electric-vehicle industry.
Commodities investors were assessing the potential damage from sanctions to Russia after President Vladimir Putin recognized two separatist republics in eastern Ukraine and ordered troops sent to them. The European Union and the U.K. set out initial packages of sanctions targeting Moscow in response to Putin’s decision to recognize the breakaway regions.
Nickel is “one of the main commodities linked to Russia given their importance to supply,” said Ryan McKay, commodity strategist at TD Securities. “So the latest events keep supply risk for the metal particularly high, especially as inventories are already at very low levels.”
Nickel inventories on the LME have fallen to the lowest since 2019 with a steep backwardation — when cash prices are much higher than futures — pointing to very tight fundamentals. Stockpiles continued to fall on Tuesday.
(By Yvonne Yue Li)