LONDON: Most base metals slipped on Wednesday as cautious investors pared positions in the wake of a halt in nickel trading, but aluminium edged up on continued worries about Russian supply.
The London Metal Exchange intervened on Tuesday to calm the nickel market after prices rocketed in a matter of hours to records of over $100,000 a tonne.
The LME does not anticipate resuming nickel trading before Friday.
Russia disruptions fuel nickel’s 30% spike to 15-year high
“The market is pausing, trying to take stock of what’s going on, and market positions are being adjusted accordingly,” said
Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“It highlights the incredible difficulty in navigating these markets right now.”
Three month LME aluminium had gained 0.7% to $3,523 a tonne by 1130 GMT, in a volatile session in which it jumped as much as 5.2% and went into the red by 1.2%.
Other base metals were down about 1%-3% in low volumes.
Aluminium remained in positive territory due to continued worries about the impact of the invasion of Ukraine by Russia, which accounts for about 6% of global supply of the lightweight metal.
Russia’s president signed a decree on Tuesday restricting the import and export of goods and raw materials “to ensure the security of the Russian Federation”, but specific materials were not identified.
The conflict and ensuing sanctions have played havoc with global supply chains, sending prices soaring across the commodities market.
Russia supplies nearly 10% of its nickel needs and also is a major producer of natural gas used to generate electricity that powers production of metals such as aluminium and zinc.
“In a world with little spare capacity and critically low inventories, any disruption to Russian material is likely to have an outsized impact on prices,” TD Securities said in a note.
China’s Shanghai Futures Exchange will suspend the trading of some nickel contracts for one day, beginning from the night trading session on March 9.
LME copper shed 1% to $10,102 a tonne, zinc dropped 2.8% to 4,021, lead fell 2% to $2,447.50, and tin slipped 1.7% to $47,810.
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