Released March 14, 2022 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Prices for key minerals, oil and wheat in Europe have surged over the past week as Russia's invasion of Ukraine disrupts production and supply routes.
Prices for nickel, used in stainless steel and lithium-ion batteries, soared by more than 75% to US$51,000 per tonne, and, at one stage in recent days, the London Metals Exchange was forced to suspend trading in nickel due to the volatility. Prices for aluminium and copper also reached record levels. Aluminium surged to US$4,026--the first time the metal had passed $4,000 per tonne--while copper's new record stood at US$10,845 per tonne. Palladium, a key mineral used in engine exhausts to reduce emissions, saw prices jump from $1,900 an ounce (oz) at the start of 2022 to US$3,440/oz last week. Nervous investors have turned to gold, which has driven prices above the US$2,000/oz mark.
In a statement, the LME said: "Following further unprecedented overnight increases in the 3 month nickel price, the LME has made the decision to suspend trading for, at minimum, the remainder of today (Tuesday 8 March 2022). The LME...has been monitoring the LME market and the effect of the evolving situation in Russia and Ukraine. It is evident that this has affected the nickel market in particular."
Russia supplies 10% of global nickel, 30% of palladium, and 6% of global aluminium output. Last year, Ukrainian researchers estimated that its eastern region--closest to the Russian border--holds close to 500,000 tons of lithium oxide, a source of lithium, which would make Ukraine one of the largest sources in the world. Any shortage of lithium is expected to hurt the rapidly growing electric vehicle (EV) sector in Europe, where Industrial Info is tracking many new battery plant projects, those currently under construction and a fast-growing number of planned projects.
Oil jumped to its highest since 2008, with Brent crude oil rocketing by almost 18% to US$139.13 a barrel, on reports that the European Union (EU) and the U.S. were mulling banning Russian oil imports. Prices have fallen somewhat since as certain major EU countries, like Germany, have said they will continue to buy Russian oil and gas. Most analysts expect that oil prices will continue to rise sharply to more than US$150 a barrel if the conflict continues. Others at Mitsubishi UFJ Financial Group Inc. (NYSE:MUFG) and JPMorgan Chase & Co. (NYSE:JPM) predict prices going as high as US$180-185 per barrel. Russia is the world's third largest oil producer behind the U.S. and Saudi Arabia, according to the International Energy Agency (IEA). In January 2022, Russia's total oil production was 11.3 million barrels per day (BBL/d) of oil, of which 10 million BBL/d was crude oil, 960,00 BBL/d condensates and 340,000 BBL/d NGLs. About 60% of Russia's oil exports go to OECD Europe. On the gas front, the reliance of the E.U. and the U.K. on Russian gas supplies has increased over the last decade to 32% last year, up from 25% of the region's total gas demand in 2009. Natural-gas prices have shot to record highs in Europe as fighting in Ukraine intensifies. Futures contracts for gas in the northwest European market rose 42% compared to last week, to more than 270 euros (US$293) a megawatt-hour (MWh). In late 2020, those prices rarely went above 20 euros per MWh.
On the food front, prices have surged for wheat and corn as supplies from both countries have been hit by the invasion and also the sanctions imposed on Russia by the West. Ukraine and Russia together account for more than a quarter of global supply of wheat and 19% of corn exports. Wheat futures prices on the Chicago Commodity Exchange are sitting at a 14-year high this week. The invasion has also halted traditional spring planting in Ukraine, which will have a longer term impact, while the United Nations has warned that the impact will be felt most severely in some Africa, Middle Eastern and developing world nations. Its World Food Programme (WFP) warned: "Ukraine has long been the 'breadbasket' of Europe, but the fighting could disrupt global wheat trade, with knock-on impacts on food prices and overall food security. Global food prices reached a 10-year high last month, according to the latest Food Price Index from the UN's Food and Agriculture Organisation (FAO). The Russian Federation and Ukraine are responsible for roughly 30% of the global wheat trade. WFP fears any serious disruption of production and exports could push food prices even higher, affecting millions of people"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: LinkedIn.
Prices for nickel, used in stainless steel and lithium-ion batteries, soared by more than 75% to US$51,000 per tonne, and, at one stage in recent days, the London Metals Exchange was forced to suspend trading in nickel due to the volatility. Prices for aluminium and copper also reached record levels. Aluminium surged to US$4,026--the first time the metal had passed $4,000 per tonne--while copper's new record stood at US$10,845 per tonne. Palladium, a key mineral used in engine exhausts to reduce emissions, saw prices jump from $1,900 an ounce (oz) at the start of 2022 to US$3,440/oz last week. Nervous investors have turned to gold, which has driven prices above the US$2,000/oz mark.
In a statement, the LME said: "Following further unprecedented overnight increases in the 3 month nickel price, the LME has made the decision to suspend trading for, at minimum, the remainder of today (Tuesday 8 March 2022). The LME...has been monitoring the LME market and the effect of the evolving situation in Russia and Ukraine. It is evident that this has affected the nickel market in particular."
Russia supplies 10% of global nickel, 30% of palladium, and 6% of global aluminium output. Last year, Ukrainian researchers estimated that its eastern region--closest to the Russian border--holds close to 500,000 tons of lithium oxide, a source of lithium, which would make Ukraine one of the largest sources in the world. Any shortage of lithium is expected to hurt the rapidly growing electric vehicle (EV) sector in Europe, where Industrial Info is tracking many new battery plant projects, those currently under construction and a fast-growing number of planned projects.
Oil jumped to its highest since 2008, with Brent crude oil rocketing by almost 18% to US$139.13 a barrel, on reports that the European Union (EU) and the U.S. were mulling banning Russian oil imports. Prices have fallen somewhat since as certain major EU countries, like Germany, have said they will continue to buy Russian oil and gas. Most analysts expect that oil prices will continue to rise sharply to more than US$150 a barrel if the conflict continues. Others at Mitsubishi UFJ Financial Group Inc. (NYSE:MUFG) and JPMorgan Chase & Co. (NYSE:JPM) predict prices going as high as US$180-185 per barrel. Russia is the world's third largest oil producer behind the U.S. and Saudi Arabia, according to the International Energy Agency (IEA). In January 2022, Russia's total oil production was 11.3 million barrels per day (BBL/d) of oil, of which 10 million BBL/d was crude oil, 960,00 BBL/d condensates and 340,000 BBL/d NGLs. About 60% of Russia's oil exports go to OECD Europe. On the gas front, the reliance of the E.U. and the U.K. on Russian gas supplies has increased over the last decade to 32% last year, up from 25% of the region's total gas demand in 2009. Natural-gas prices have shot to record highs in Europe as fighting in Ukraine intensifies. Futures contracts for gas in the northwest European market rose 42% compared to last week, to more than 270 euros (US$293) a megawatt-hour (MWh). In late 2020, those prices rarely went above 20 euros per MWh.
On the food front, prices have surged for wheat and corn as supplies from both countries have been hit by the invasion and also the sanctions imposed on Russia by the West. Ukraine and Russia together account for more than a quarter of global supply of wheat and 19% of corn exports. Wheat futures prices on the Chicago Commodity Exchange are sitting at a 14-year high this week. The invasion has also halted traditional spring planting in Ukraine, which will have a longer term impact, while the United Nations has warned that the impact will be felt most severely in some Africa, Middle Eastern and developing world nations. Its World Food Programme (WFP) warned: "Ukraine has long been the 'breadbasket' of Europe, but the fighting could disrupt global wheat trade, with knock-on impacts on food prices and overall food security. Global food prices reached a 10-year high last month, according to the latest Food Price Index from the UN's Food and Agriculture Organisation (FAO). The Russian Federation and Ukraine are responsible for roughly 30% of the global wheat trade. WFP fears any serious disruption of production and exports could push food prices even higher, affecting millions of people"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: LinkedIn.
