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8 Mar, 2022 09:56

Nickel price hits record high on supply woes

The cost soared past $100,000 per ton for the first time in history
Nickel price hits record high on supply woes

The price of nickel on Tuesday soared to a historic high on fears that Russian supplies may run dry amid Ukraine-related sanctions.

The price of nickel on the London Metal Exchange (LME) grew by 110.8% to $101,350 per ton around 08:00 GMT. It exceeded $100,000 per ton for the first time on record and grew almost 3.5 times since the beginning of the week. It later lost some of the gains, however, trading at $82,340 per ton by 09:00 GMT.

Analysts explain the surge in nickel price by fears of potential supply interruptions, as the metal is a key component of lithium-ion batteries, used in everything from home appliances to electric cars, as well as a major component for producing stainless steel.

The stock market rush with the price of nickel is caused by fears of a shortage of the metal in the event that there are interruptions in shipments from Russia, which is a major global supplier, due to logistical or financial problems, as well as potential new sanctions from the West,” Finam analyst Aleksey Kalachev told TASS. The analyst noted, however, that the sanctions affecting Russian nickel “are unlikely, since there is a high dependence on supplies from the Russian Federation.

Russia produces nearly 10% of the global nickel supply. Russian company Norilsk Nickel is number one in the world in terms of production of high-grade nickel, with a share of more than 20%.

Russian miners and metal producers have so far evaded Western sanctions placed on Russia after Moscow launched a military operation in neighboring Ukraine. Still, it is becoming harder for nearly all Russian companies to do business as more and more international operations with Russia are being hit by penalties. Some market insiders say there are moves among Western financial institutions to stop dealing with Russian companies, while others believe that Russia’s foreign partners have been seeking ways to deliver Russian commodities indirectly in case the direct shipping procedures are banned.

Other metals also surged on supply fears. Palladium, 30% of which is also produced in Russia, rocketed from around $1,900 an ounce at the start of the year to $3,886 – a multi-year high. Aluminum set a new record at over $4,000 per ton on Monday, while copper soared to $10,542.5 a ton.

For more stories on economy & finance visit RT's business section

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