Commodities such as aluminum, nickel, and zinc have boomed following Russia's invasion of Ukraine, which has exacerbated long-standing fears of supply shortages and rising energy costs.
Investors fear retaliatory action from any sanctions imposed by the West after Russia launched a full-scale invasion of Ukraine in the biggest attack by one state against another in Europe since World War Two.
Wholesale gas prices have soared over 30 percent amid supply shortage concerns, with Europe dependent on Russia for around 40 percent of its natural gas.
Three-month aluminum prices on the London Metal Exchange hit a record $3,449 this morning and were still up 3.8 percent at $3,428 around midday.
Aluminum prices have risen around 60 percent over the past 12 months, but the emergence of conflict in the region has deepened investor worries.
Russia produces around six percent of the world's aluminum and produces around 10 percent of global nickel supplies.
Following the instigation of conflict in Ukraine, benchmark prices for nickel have climbed 3.4 percent to $25,220 a tonne, having earlier touched $25,610 a tonne today, the highest since May 2011. Meanwhile, zinc prices have also risen to $3,615 per tonne.
The commodity markets were already buoyant amid supply shortages, pandemic-driven disruption, and rising demand.
Aluminum, nickel, and zinc are used for multiple consumer products alongside being valuable materials in electric vehicles.
Commerzbank analyst Daniel Briesemann, said: "Against this backdrop, little attention is being paid to recently published fundamental data. However, they show that the zinc market - alongside the aluminum, copper, and nickel markets - was also substantially undersupplied last year."
By CityAM
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