Aluminium heads for biggest quarterly gain since 1988
31 March 2022 - 19:46
byAgency Staff
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London — Aluminium prices were on track for their biggest quarterly gain since 1988 on Thursday, driven by supply disruptions and increased production costs resulting from Russia’s invasion of Ukraine.
Similarly, nickel headed towards its largest quarterly rise since 2009, helped by a short squeeze on the London Metal Exchange (LME) that caused a price spike this month.
Russia produces about 6% of the world’s aluminium and 10% of its nickel, along with other metals, energy and wheat.
Sanctions against Russia have cut or complicated shipping routes and driven up the price of energy used to power smelters — with Russian demands that payments for gas be made in roubles raising further supply fears in Europe this week.
High power costs have already forced some aluminium and zinc smelters in Europe to reduce output.
Benchmark aluminium on the LME was down 1.6% at $3,493 a tonne at 4.15pm GMT on Thursday but is up 24.4% this quarter.
LME nickel was down 2% at $32,250 and up about 55% over the quarter.
Both metals reached record highs in March, though nickel’s was later cancelled by the LME as it sought to stabilise the market after a savage price spike on March 8.
Metals prices are likely to rise further as inflation pushes investors towards commodities, with tight supplies of industrial metals and the risk of further sanctions against Russian output also boosting prices, said ING analyst Wenyu Yao.
“Upside risk will dominate in the next few months,” she said.
Among the threats to demand are measures to contain the spread of Covid-19 in China, the biggest metals consumer. Chinese factory activity contracted in March, but the government says it will prop up economic growth.
LME copper was up 0.1% at $10,374 a tonne on Thursday and about 6% higher in the first quarter. Prices reached a record high in March.
Zinc rose 0.5% to $4,169.50 and was up about 18% for the quarter after also hitting a record peak in March.
Lead fell 0.3% to $2,410 and has gained about 5% in the first three months of 2022.
Tin was up 0.8% at $42,840 and has risen 10% in the first quarter, having reached a record high in March to help it towards an eighth consecutive quarterly gain.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Aluminium heads for biggest quarterly gain since 1988
London — Aluminium prices were on track for their biggest quarterly gain since 1988 on Thursday, driven by supply disruptions and increased production costs resulting from Russia’s invasion of Ukraine.
Similarly, nickel headed towards its largest quarterly rise since 2009, helped by a short squeeze on the London Metal Exchange (LME) that caused a price spike this month.
Russia produces about 6% of the world’s aluminium and 10% of its nickel, along with other metals, energy and wheat.
Sanctions against Russia have cut or complicated shipping routes and driven up the price of energy used to power smelters — with Russian demands that payments for gas be made in roubles raising further supply fears in Europe this week.
High power costs have already forced some aluminium and zinc smelters in Europe to reduce output.
Benchmark aluminium on the LME was down 1.6% at $3,493 a tonne at 4.15pm GMT on Thursday but is up 24.4% this quarter.
LME nickel was down 2% at $32,250 and up about 55% over the quarter.
Both metals reached record highs in March, though nickel’s was later cancelled by the LME as it sought to stabilise the market after a savage price spike on March 8.
Metals prices are likely to rise further as inflation pushes investors towards commodities, with tight supplies of industrial metals and the risk of further sanctions against Russian output also boosting prices, said ING analyst Wenyu Yao.
“Upside risk will dominate in the next few months,” she said.
Among the threats to demand are measures to contain the spread of Covid-19 in China, the biggest metals consumer. Chinese factory activity contracted in March, but the government says it will prop up economic growth.
LME copper was up 0.1% at $10,374 a tonne on Thursday and about 6% higher in the first quarter. Prices reached a record high in March.
Zinc rose 0.5% to $4,169.50 and was up about 18% for the quarter after also hitting a record peak in March.
Lead fell 0.3% to $2,410 and has gained about 5% in the first three months of 2022.
Tin was up 0.8% at $42,840 and has risen 10% in the first quarter, having reached a record high in March to help it towards an eighth consecutive quarterly gain.
Reuters
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