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Fears of new US sanctions against the Russian Federation caused a nickel price rise

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Fears of new US sanctions against the Russian Federation caused a nickel price rise
April 18
09:00 2018

On Wednesday, during the bidding process on the London Stock Exchange nickel rose in price to its maximum in the past three years. This is due to concerns about a new wave of sanctions by the USA. The agency Bloomberg reports that sanctions will necessarily affect the supply of nickel to the world market.

According to analysts, in case the moratorium touches the company MMC Norilsk Nickel, the world nickel market will experience a significant increase in supply shortage.

During today’s trading, quotations of a three-month nickel contract on the London Metal Exchange (LME) have grown by 4.6% – to $ 14,070 per ton. This is an official maximum since February 2015. The price growth for this metal increased the fall in its production by 18% at the fields of the Brazilian company Vale SA. We recall that this company is the world’s leading producer of iron ore and nickel. The growth was influenced by the forecast of market experts about the coming rush demand for electric cars, where this material was highly needed.

On April 6, sanctions against the Russian aluminum company RusAl came into effect (accounting for 6% of the world aluminum). They caused an aluminum price increase to its maximum since September 2011 (USD 2,481 per ton). The analysts of one of the world’s largest investment banks Goldman Sachs Group do not exclude a price rise for a ton of aluminum to $ 3000 in the near future.

Anthony Everis, an expert of the private research company CRU Group, noted that the situation on the metal market was changing rapidly. Today, for example, 30,000 tons of alumina have been sold at a record price of $ 24 million. We recall that alumina means crushed ore raw material, which the smelting plants use to produce aluminum. The previous record had been unchanged for 12 years since 2006, it was equal to 610 US dollars per ton; the new record totaled 800 US dollars per ton.

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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