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Why metal prices surged on 7 March 2022
Summary
A look back at the day aluminium, nickel and copper hit record highs as markets weighed Russian supply risks.
What happened to metal markets on 7 March 2022, and why did Russia sit at the centre of it? Aluminium and nickel registered record prices on the London stock exchange, at about $4,000 and $55,000 per tonne respectively. Nickel rose 90% during intraday trading.
Copper also reached a new high, at $10,845 per tonne, while palladium climbed to $3,440 per ounce.
The sanctions link
The common thread was Russia, a substantial producer of all of these metals. As reported at the time, the market expected shortages as the country was hit by further sanctions. The price moves reflected that expectation of tighter supply.
A parallel search for energy
The pressure was not limited to metals. On 6 March 2022, the United States began talks with Venezuela about supplies of its oil, which was under sanctions, in an attempt to substitute Russian crude. So far the talks had yielded few results.
Taken together, the two developments showed how sanctions on Russia were feeding through to commodity markets and prompting a search for alternative suppliers.
