Update: Since publishing this update, the London Metal Exchange in an unprecedented move has decided to cancel all nickel trades carried out today. One entity has control of between 50% and 80% of LME nickel inventories, LME data shows, and the battle between a very big long and multiple large short positions has been brutal. Link to Reuters article here
The turmoil across markets continues following Russia’s unprovoked invasion of Ukraine, not least across the commodity sector where tougher US and European sanctions leading to a great deal of self-sanctioning has increasingly cut off supplies from Russia, thereby impacting several key commodities from gas and oil to several industrial metals and key crops such as wheat. Ukraine, often called the breadbasket of Europe given its extensive fertile lands, which are naturally suited to grain production, has seen is supply chains break down with closed harbors preventing exports of key food commodities such as wheat, barley and corn.
With a great deal of self-sanctioning unfolding we are increasingly seeing Russian produced raw materials being treated as toxic, and not to be touched. The latest example of this was today’s announcement from Shell, that they would stop all spot purchases of Russian crude oil. The decision comes as a response to the uproar that followed the company’s decision last Friday to buy a deeply discounted cargo of Russian crude oil.
As a result of these developments the price gains across individual commodities have become very extreme as per the below table.