LONDON: Aluminium prices rose on Tuesday as traders worried about supply shortages, while nickel began trading in volume on the London Metal Exchange (LME) for the first time in two weeks.
Benchmark aluminium on the LME was 1.5% higher at $3,574 a tonne at 1216 GMT, up about 10% from last Tuesday’s close.
Investors are weighing the risks of undersupply and slowing economic growth that would reduce demand, said Saxo Bank analyst Ole Hansen.
But he said transition to a low-carbon economy should still boost demand for metals and so “on balance I’m still positive (for prices)”.
Australia: Aluminium has jumped this week after Australia banned the export of materials used to make the metal to Russia, which produces around 6% of global supply of the metal used in transport, packaging and construction.
Smelters: Meanwhile, Germany-based TRIMET became the latest smelter to cut aluminium output in Europe due to higher energy prices, which have spiked since Russia invaded Ukraine.
LME aluminium slips amid diplomatic efforts to end Ukraine crisis
Prices: Uncertainty pushed the price of aluminium to a record high of $4,073.50 on March 7 and as low as $3,219.50 on March 15.
War: US President Joe Biden issued his strongest warning yet that Russia is considering using chemical weapons.
Premiums: A global aluminium producer has offered Japanese buyers premiums of $195 a tonne for April-June shipments, up 10% from the current quarter, sources said.
Nickel: LME nickel was down 9.7% at $28,330 a tonne. For the first time since resuming trade on March 16 the contract didn’t hit its downside limit and metal was changing hands.
The pick-up in activity suggests the market is returning to normal after a price surge, a six-day trading suspension and a problematic restart due to technical glitches.
Supply: The global nickel market saw a surplus of 6,000 tonnes in January after a deficit last year, the International Nickel Study Group (INSG) said.
Markets: US and European equities edged higher after Jerome Powell said the Federal Reserve could move “more aggressively” to raise rates. Oil prices rose.
Metals Prices: LME copper was up 0.4% at $10,339.50 a tonne, zinc fell 0.5% to $3,922, lead rose 1% to $2,280 and tin was up 0.3% at $41,860.
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