March 4, 2022

As of this writing (7:15AM CST), LME Aluminum 3M last traded at $3,820/mt, which is up about $440/mt for the week, or 13.2%, and is poised to have a record close. LME Nickel 3M last traded at $28,205/mt, up $3,990/mt on the week, or about 16.5%, the highest levels since 2011. Even before the Russia-Ukraine conflict, metal supply has been scarce, and supply is now more at risk. Several large Russian banks and people close to Vladimir Putin have been sanctioned; however, no metals producers have been directly sanctioned.  That said, even without direct sanctions on any Russian metals producers, metals prices have rallied as supply-chain issues continue to mount. Ukraine, which is a major steel producer and exporter, has closed all ports until the end of the war, according to Ukraine’s Maritime Administration. Several major shipping companies have cancelled bookings to and from Russia, according to Reuters. This could slow or stop metals shipments from the country. Importers are already beginning to source material from other suppliers, according to mining.com.

Consumers who are concerned about input costs might consider purchasing swaps or call options. Please note that doing so might incur losses if prices decrease. Please contact AEGIS for specific strategies that fit your operations. (3/4/22)

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AEGIS Insights

03/02/2022: AEGIS Factor Matrices: Most important variables affecting metals prices

02/15/2022: Section 232 Tariffs: Most relevant developments (AEGIS Reference)

3/3/22: Copper close to record, zinc at 15-year high, nickel nears $28,000 as metal price rally gains momentum

3/1/2022: World's largest container lines suspend shipping to Russia

3/1/2022: Russian miners hit by sanctions likely to get boot from FTSE 100

3/1/2022: Aluminium nears record high as Russia-Ukraine conflict threatens supplies

2/28/2022: Rusal halts alumina shipments from Ukraine

2/28/2022: Ukraine’s Ports to Stay Closed Until Russian Invasion Ends – Maritime Administration

2/28/2022: Invasion sparks EU flat steel supply concerns

2/25/2022: Ukraine ports and steel plants shut down: Update

2/24/2022: Invasion halts Ukraine steel shipments; appetite wanes for Russian steel