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The aggravation of the conflict in Ukraine and the increasingly harsh sanctions once morest Russia are causing metal prices to soar to new records, as is the case for nickel. Its price reached 55,000 dollars per ton, an increase of 90% compared to the previous session on the London metal exchange, the world benchmark market.
Russia is one of the largest nickel producers in the world. It represents nearly 10% of world production. Fears of a possible disruption of supplies of Russian metals due to the escalation of the conflict in Ukraine are gripping the markets. The exclusion of several Russian banks from the international Swift payment system and logistical disruptions, such as those caused by shipowners breaking off their relations with Russia, complicate Russian exports to Western countries. Faced with this situation, panicked investors are buying nickel to make reserves.
All this occurs in a context of tension between supply and demand. Global nickel stocks recorded on the London Metal Exchange are low amid robust demand. The prices therefore only go up. Since the beginning of the year, the price of nickel has jumped 76% in London. Main reason: demand from the automotive industry.
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Metal is indeed necessary for the batteries of electric vehicles, it makes it possible to limit their size. The sector is also booming. Example: electric vehicles now represent nearly one in five new cars sold in the European Union. And many major automakers have made a radical move to electric. They have promised to remove combustion engines from their range for some as early as 2030. But this sharp rise in nickel risks slowing the transition to electric cars and considerably increasing their selling price.