Base metals set for best-ever week as war stokes shortage fears

The world’s most important metals are heading for the biggest weekly gains on record as Russia’s invasion of Ukraine sparks a clamber for supplies.

Commodities markets from metals to oil and gas have been upended by the war in Ukraine as big corporates withdraw from Russia, lenders pull back from financing deals and the threats of new sanctions deter buyers.

A Bloomberg gauge of industrial metals has surged 11 per cent this week, on course for the biggest-ever rise. Aluminum hit a fresh record on Friday, nickel surged as much as much as 7.8 per cent to a decade-high and zinc is the most expensive since 2007.

It’s getting increasingly difficult to transport commodities like metals since almost half of the world’s container ships no longer go to Russia, a crucial supplier of aluminum and nickel. Soaring global fuel prices also are a headache for the market as production costs increase and pile pressure on smelters.

Nickel has been among the biggest movers this week, jumping 16 per cent, to trade at $28,255 a ton on the London Metal Exchange. Russia is a key source of the metal, crucial for electric-vehicle batteries and stainless steel. Aluminum rallied 13 per cent this week, set for its best such performance. Zinc has risen 11 per cent, while copper has also climbed to move closer to a record.

Even before the war, metal prices were soaring amid the global recovery from the pandemic, as demand roared back and suppliers were constrained.

Yet Russia’s invasion has propelled prices to a whole new level, piling more inflationary pressure on global markets.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor