Russian nuclear alert and Western sanctions raise fears for supplies of raw materials

World commodity prices rose on Monday with strong gains in oil, grains, edible oils and metals, after Russia put its nuclear deterrent force on high alert and Western countries imposed new sanctions on Moscow following its invasion. to Ukraine.

ANDBrent oil rose around 4% and exceeded US $ 100 per barrel, palladium soared 4% yeChicago wheat gained about 5% as buyers they tried to figure out how to dispense with supplies from Russia if sanctions disrupt trade.

Aluminum hit an all-time high of $3,525 a tonne on the London Metal Exchange, while Malaysian palm oil gained almost 6%, as the effects of Russia’s possible separation from world oil markets raw materials made themselves felt.

“The near-term price range for commodities has become extreme, given concerns of further military escalation, energy sanctions or the possibility of a ceasefire,” Goldman said in a note to clients on Sunday.

The ruble plunged almost 30% to a record low after the West imposed new sanctions on Russia, including the exclusion of some banks from the SWIFT global payment system.

Putin upped the ante on Sunday, ordering Russia’s nuclear-wielding “deterrent forces” to be on high alert, citing statements by NATO leaders and the range of economic sanctions imposed on Russia by the West. Russia calls its actions in Ukraine a “special operation.”

Brent rose above $100 a barrel as the nuclear alert and bank payment restrictions raised fears that oil shipments from the world’s second largest producer could be disrupted. Russia accounts for about 10% of the world’s oil supply.

In agricultural markets, Chicago wheat posted its biggest one-day gain in a decade on concerns about supplies from Russia, the world’s leading exporter of the ingredient for bread making.

The corn gained 4%, while soybeans rose 2.6%.

Russia and Ukraine account for about 29% of world wheat exports, 19% of the world supply of corn and 80% of world exports of sunflower oil.

Metals markets also rose, with palladium rising as sanctions imposed on Russia raised concerns about supplies of the metal used in auto catalysts, of which Russia accounts for roughly 40% of global production.

Fears of supply disruptions also pushed aluminum prices on the London Metal Exchange to an all-time high and nickel higher. Russia produces about 6% of the world’s aluminum and accounts for about 7% of the world’s supply of nickel from mines.

Aluminum on the London Metal Exchange hit a record high of $3,525 a tonne and nickel rose 1% to $24,615 a tonne, after rising 3% in the session.