Start each business day with our analyzes of the most pressing developments affecting the markets today, along with a curated selection of our latest and most important news on the global economy.

Suspension of nickel trade continues

The London Metals Exchange has maintained its suspension of nickel trading, as commodity prices continue to climb to all-time highs in response to Russia’s intensified attacks on Ukraine.

At the epicenter of the global metal trade, the LME has found itself caught in the fallout of the Russian-Ukrainian conflict. The 145-year-old stock exchange suspended nickel trading on March 8 after prices for the metal, of which Russia is the world’s fourth largest producer, jumped 250% in two days to a record high of more than 100 $000 a ton, according to S&P. Global commodity outlook. The LME kept its nickel market closed today and said it would continue to do so tomorrow. The halt in nickel trading, a decision not seen since the stock exchange decreed a similar suspension of tin trading in 1985, would be reversed when “operational procedures for effecting a safe reopening” and analyzes of the possibility to “offset long and short positions” are available “as soon as possible”.

“The fallout from Russia’s invasion of Ukraine and the subsequent sanctions imposed by the U.S. and European governments has been a factor behind greatly heightened fears that exports of nickel from Russia, one of world’s largest producers of mined and primary nickel, could be disrupted,” Jason Sappor, principal analyst for S&P Global Commodity Insights, told S&P Global Market Intelligence. “This triggered panic buying in an already tight primary nickel market, supporting the recent surge in the LME nickel price.”

The market reaction to Russia’s invasion of Ukraine, particularly in the form of a spike in nickel prices and the suspension of trade, reflects concerns among industry players about how sanctions will affect the global metals market, how the underlying nickel supply crunch could worsen if suppliers cannot deliver to market, and how to contain the deep consequences of the crisis. For example, prolonged high nickel prices could drive up the costs of electric vehicles, as the metal is a key component of the multiple types of lithium-ion batteries used to power them.

“The fundamental story for nickel was pretty bullish before the Russian invasion of Ukraine,” Tom Mulqueen, head of research at metal derivatives broker and trader Amalgamated Metal Trading, told S&P Global Market Intelligence. “It just added fuel to the fire and started this chain reaction of margin calls. You have shorts who weren’t able to meet their margin calls, and it just reinforced itself in price.I don’t think anyone was anticipating the scale or pace of what we saw.

Nickel is one of many metals whose price has skyrocketed since Russia first invaded Ukraine on February 24. Main metals benchmarks have risen significantly since late February, and the price of uranium topped $50 a pound for the first time in a decade last week.

Today is Monday, March 14, 2022and here is today’s essential intelligence.

Written by Molly Mintz.


Biden’s public land policies in spotlight as US oil and gas prices rise

The oil and natural gas industry and GOP lawmakers are clashing with the Biden administration over its public land policy for power generation as oil prices hit multi-year highs. Oil and gas production from federal lands accounts for a small portion of national production, and the White House and administration advocates have noted that many approved leases go unused. But industry trade groups and Republicans in Congress have said the administration’s policies are nonetheless hampering production at a time of market upheaval.

—Read the full article from S&P Global Market Intelligence

Access more information on the global economy >

Capital markets

Fashionable style outlook

U.S. equities had a rough start to the year due to growing inflation concerns, anticipated rate hikes by the Federal Reserve, profit losses from several very large-cap companies, and ongoing geopolitical tensions emanating from the Russian-Ukrainian conflict. Figure 1 shows that the S&P 500®, S&P MidCap 400®, and S&P SmallCap 600® all declined in the first two months of 2022, as did the majority of their respective sector, style, and pure style indices. Energy was a notable outlier, boosted by soaring commodity prices.

—Read the full article from S&P World Indices

Access more information on capital markets >

International trade

Analysis: The Black Sea conflict could alter global trade patterns for grains and vegetable oil

Pressure on global agricultural markets is mounting as the Russia-Ukraine conflict enters its third week, as prolonged hostilities could force grain and oilseed buyers who depend on the two major Black Sea producers to look elsewhere for their supplies. Disrupted supplies from the region have raised concerns about food inflation, particularly as world grain and oilseed prices are at record highs. The two countries account for about 26% of world wheat exports. Russia has exported 26 million tonnes of wheat so far in the 2021-22 marketing year (July-June), which is 80% of the US Department of Agriculture’s estimate for the year. and Ukraine 18 million tons, which represents 90% of the USDA. estimate.

—Read the full article from S&P Global Commodities Outlook

Access more information on global trade >


Listen: IPCC climate report warns that transformational change is no longer optional

In the latest episode of ESG Insider, hosts Lindsey Hall and Esther Whieldon chat with one of the main authors of the IPCC report, Dr. Edward Carr, director of the Department of International Development, Community and Environment at Clark University. He was a lead author of the IPCC report’s chapter on climate-resilient development pathways, which outlines the role businesses and investors can play in adaptation. The good news, Ed says, is that companies are well positioned to develop longer-term adaptation plans and find new opportunities for transformation. At the same time, companies cannot do it alone. Governments, the private sector and the public must all work together to adapt to climate change and reduce emissions.

—Listen and subscribe to ESG Insider, a podcast from S&P Global Sustainable1

Access more information on ESG >

Energy and raw materials

Key Iron Ore Market Trends in a Volatile Business Environment in 2021

Volatility gripped the iron ore market last year. Huge price moves saw multi-year highs followed by steep falls as supply and demand collapsed over the months. S&P Global Commodity Insights Platts 62% Fe IODEX started 2021 at $164.5/dmt on January 4 and rebounded to an all-time high of $233.1/dmt on May 12 before falling 48.9% from from the top to close at $119/dmt on Dec 12. 31. S&P Global Commodity Insights uncovers key trends that have emerged in the iron ore market, including much-needed data on topics such as brand-level market liquidity, price assessment participation and pricing mechanisms.

—Read the full article from S&P Global Commodities Outlook

Access more information on energy and raw materials >

Technology and media

Around the tracks: Parts shortages stifle vehicle production due to cutbacks in Russia

The global shortage of semiconductors continued to affect production of vehicle markers through early 2022. For the second time, in February, Japan’s Toyota Motor lowered its production forecast for the fiscal year ending March 31 to 8.5 million units. Its first revision took place in September 2021 at 9 million units against an initial forecast of 9.30 million units. In addition to chip cuts, high commodity prices could hamper stimulus plans – Russia’s invasion of Ukraine as well as high energy costs could keep prices inflated.

—Read the full article from S&P Global Commodities Outlook

Access more information on technology and media >

About The Author

Related Posts