The Ukrainian situation compounded supply threats in a market that is already suffering from a severe shortage of the widely used metal, pushing aluminum to a new high in London, topping a 2008 high.
After his counterpart, Vladimir Putin, ordered a military strike on Ukraine, US President Joe Biden warned that Russia would face harsh penalties.
High energy costs will hurt European factories
This raises the prospect of sanctions affecting Russian aluminum supplies, as well as other commodities ranging from oil to nickel.
Aluminum rose 2.9 percent to $3,388 per tonne on the London Metal Exchange, continuing its recent rise.Consumers, who use metal in everything from cables to drink cans, would face increased inflationary pressures as a result of the profits.
Prices of commodities ranging from nickel to gasoline have risen in recent months as demand skyrocketed after the world emerged from the epidemic and supply lagged.
Aluminum inventories are at an all-time low, so the metal’s surging price is putting pressure on manufacturers, and analysts expect it to rise much more. In the face of extraordinary supply constraints, Goldman Sachs Group Inc. predicts that prices will exceed $4,000/t in the next 12 months.