Prices for a range of commodities are at record levels as buyers scramble to source raw materials with supply disruptions caused by Russia’s invasion of Ukraine intensifying.
The price of nickel rose 76% yesterday (March 7), as palladium reached a record high and gold broke through $2,000 U.S. an ounce, while oil and wheat prices hit 14-year highs.
Commodity markets have been shaken not only by tough economic sanctions imposed on Russia that might be widened to include oil, but logistics turmoil that has blocked the flow of grains and metals from the country.
Worries about an oil ban roiled European gas prices, which hit record highs. In a note to clients, JPMorgan Chase (JPM) analysts said oil could soar to $185 U.S. this year.
The panic caused investors to take cover in gold, regarded as a safe haven asset. Spot gold prices hit $2,002.40 U.S., its highest level since August 2020.
Palladium prices jumped 15% higher to an all-time peak of $3,440 U.S. an ounce on fears of shortages of the metal used by automakers in catalytic converters. Russia accounts for 40% of global palladium production.
Industrial metals also rose, led by nickel, which surged 76% to a 15-year high of $51,000 U.S. a tonne as global supply chains tried to price in the possible absence of supplies from Russia, the world’s third largest nickel producer.
Both copper and aluminium also touched record highs.
On agricultural markets, Chicago wheat futures rose more than 7%, hitting a 14-year high, as traders worried about the impact the Ukraine conflict is having on supplies from Russia, the world’s biggest wheat exporter.