LONDON: Nickel prices surged on Wednesday as major producer Russia proposed an export ban on the battery metal in retaliation against western sanctions over the war in Ukraine.
Three-month nickel on the London Metal Exchange (LME) climbed as much as 2.6% to $16,145 a metric ton shortly after Russian President Vladimir Putin said that Moscow should consider limiting exports of uranium, titanium and nickel.
Nickel was up 2.3% at $16,100 by 1553 GMT.
Russia is home to Nornickel, the world’s biggest producer of refined nickel and a major supplier to China and Europe.
More than a fifth of the nickel in LME-registered warehouses is of Russian origin, data showed on Tuesday.
Russia’s proposed ban could flip nickel into deficit from current global oversupply of 100,000 tons for 2024/25. Russia sold 100,990 tons of nickel overseas last year, according to Trade Data Monitor.
Rapid expansion of nickel production in Indonesia has pressured nickel prices in the past two years to make many operations unprofitable, such as BHP’s West-Australian nickel operations.
Prices of other metals also firmed as investors factored in expectations of the first interest rate cut from the US Federal Reserve in more than four years.
Base metals and gold are likely to remain buoyed until the rate decision on Sept. 18, said Tom Price, head of commodities strategy at Panmure Liberum.
Fed rate cuts would help to boost economic activity and demand while also weighing on the U.S currency, making dollar-priced metals cheaper for holders of other currencies.
Three-month copper was up 0.9% at $9,105 a ton, lead climbed 1.7% to $1,989, aluminium rose 1.7% to $2,377, tin was up 1.3% at $30,930 and zinc advanced 2% to $2,766.50.
The market expects the US central bank to trim rates by 25 basis points at each of the three remaining policy meetings in 2024, a Reuters poll of economists showed on Wednesday.
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