Metal Markets Brace for Even Tighter Supply as Russian Exports Sink
- March 1, 2022
- Posted by: Quatro Strategies
- Category: Mining
Russia’s invasion of Ukraine has prompted buyers of Russia’s industrial-metal to pull back, causing the country’s exports to crumble. Since the invasion began, Russia’s top steelmakers have seen exports drop and nickel exports have decreased as well. While the reaction of importers differs from one country to another, Germany has terminated almost all steel purchases.
Russia is one of the top five global producers of steel, nickel and aluminum, which makes the disruption of trade even more problematic for the markets, already short on supply. Although metals have not been directly targeted by sanctions, prices are soaring on the concerns about payment to suppliers while banks are reluctant to finance Russian commodity exports.
Russia’s metal exports are falling amid buyer hesitancy regarding sanction uncertainty and escalation. Other than Russia, deliveries from Kazakhstan and Uzbekistan have also been dropping which is an additional cause for concern that markets will see accelerated tightening in the short term.
Nickel futures on the London Metal Exchange climbed as much as 3% on Monday before losing gains and closing the day 0.3% lower at $24,282 per metric ton. Aluminum also surged as much as 5% to a new record, before easing to a 0.3% hike, at $3,368.50 per ton.
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