Metals extend scorching rally on Russia; commodity price gauge hits all-time high
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Aluminum surged as much as 3.4 per cent to a fresh record-high.
PHOTO: AFP
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LONDON (BLOOMBERG) - Zinc reached its highest since 2007 and other industrial metals extended a powerful rally fueled by trade turmoil and rising energy costs amid Russia's increasing economic isolation.
The metal used to coat and protect steel rose as much as 3.7 per cent on the London Metal Exchange to reach US$4,004.50 a ton.
Zinc traded at US$4,003.50 a ton by 7.15am London time. Aluminum surged as much as 3.4 per cent to a fresh record-high while nickel gained 6.1 per cent.
Commodities markets from metals to oil and gas have been upended by the Ukraine crisis as big corporates withdraw from Russia, lenders pull back from financing deals and the threat of new sanctions deters buyers.
Bloomberg's gauge of commodity prices reached an all-time high on Wednesday.
It's getting increasingly difficult to transport commodities like metals, which are shipped in containers as almost half of the world's container ships will no longer go to and from Russia. Soaring global fuel prices add to upward pressure for metals by raising production costs and piling pressure on smelters.
Alcoa, the largest US aluminum producer, said it will stop selling products to Russian companies, and halt buying of raw materials from the country.
The turmoil comes at a time when global metals stockpiles are already low and falling further. Orders for aluminum jumped by 70,700 tons - the most since June. Freely-available nickel stockpiles fell to the lowest since December 2019, while zinc holdings declined to the lowest since July 2020.
Zinc traded at US$4,003.50 a ton by 7.15am London time. Aluminum surged as much as 3.4 per cent while nickel gained 6.1 per cent.
