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KOMODITAS - JAKARTA. London aluminium and nickel prices rose to multi-year highs on Tuesday, driven by concerns over supply disruption from Russia in an already tight market as tensions escalated in eastern Europe.
Russian President Vladimir Putin ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognising them as independent on Monday.
The United States is coordinating with allies and will announce new sanctions against Russia - a major producer of nickel and aluminium - on Tuesday.
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Three-month aluminium on the London Metal Exchange gained 1.2% to $3,318.5 a tonne, as of 0635 GMT, having earlier risen to a more than 13-year high of $3,342. Benchmark nickel rose 1.2% to $24,630, having earlier hit a peak since August 2011.
"Aluminium and nickel continue to look good given any sanctions will likely be targeted at where it will hurt most – commodity exports," broker Marex said in a note.
The premium for cash nickel over the three-month contract rose to a three-week high of $522 a tonne on Monday, while the premium for cash aluminium was at $45.30 a tonne, indicating tightness in nearby supplies.
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"In the near- to medium-term, aluminium prices are likely to hover in the higher trajectory, but things may calm once (U.S. President Joe) Biden and Putin come out with an agreement on Ukraine," said Kunal Sawhney, chief executive at research firm Kalkine, adding that "then, not supply worries, but demand forces would decide prices."
The most-traded March nickel contract on the Shanghai Futures Exchange rose to a record high of 181,350 yuan ($28,595.98) a tonne, and was last up 0.9% at 179,800 yuan.
