Aluminum rallied to a record in London and nickel surged to the highest in more than a decade, pacing gains in industrial-metals markets as the deepening Ukraine crisis added to supply risks in an industry already facing critical shortages.
The crisis in Ukraine is heightening concerns over the threat of supply disruptions in commodities from grains to metals and oil. Aluminum pared gains after a Bloomberg report that the Biden administration will hold off for now on sanctions against Russia on the metal.
The gains will heap fresh inflationary pressure on buyers who use aluminum in everything from cables to drinks cans, and the threat of disruption will be particularly troubling for manufacturers in Europe who buy large volumes of specialist products using it that come from Russia.
There’s also mounting concern about supply from western producers, who face even more extreme spikes in gas and power prices. Even with aluminum prices at a record-high, surging energy prices means some smelters remain unprofitable.
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