Just as we suggested it would be at the end of last month, the nickel market has been thrown into disarray.
Low inventories and concerns about supply forced the London Metal Exchange – still the world’s premier hub for buying and selling base metals – to suspend trading.
Some commentators talked of a short squeeze - although why anyone would be shorting nickel at a time like this is an open question.
Nevertheless, the price did at one point spike over the US$100,000 per tonne mark, an unprecedented all-time high, and almost double the levels nickel traded at the last time supply and demand really got out of kilter, back in the middle of the first decade of this century.
The price was already on the way down, though, by the time the LME got around to suspending trading, and subsequently the prices of other base metals, which had initially followed nickel up, also fell back.
Even so, across the board, all the commodities continue to trade at elevated prices.
Russia is a major producer of metals.
It was the world’s third largest nickel producer in 2020, the last year for which data has been compiled.
During 2020, it produced 270,000 metric tonnes, or roughly one tenth of total global production.
Indonesia and the Philippines filled the number one and two slots respectively, with Indonesia far out ahead at 800,000 tonnes of annual production.
The nickel price was already at a ten year high ahead of the latest moves of Russian troops into the Ukraine, in anticipation of demand fuelled by post-covid stimulus packages and and electric vehicle batteries.
Companies with nickel assets outside of the immediate areas of conflict, like VALE, BHP and Horizonte Minerals might expect to benefit, and old operations like Bindura in Zimbabwe could be brought back on line after decades in hiatus.
Australia also has a well developed in-country nickel exploration scene, fuelled by a plethora of juniors like Mincor, Estrella, Ardea, Western Mines, Auroch, Aldoro and Venture Minerals.
In Canada, Canalaska Uranium Ltd has just started drilling its Manibridge nickel project in the Thomson Nickel Belt in Manitoba.
Russia is also the world’s second largest producer of gold, after China, and the second largest producer of platinum, after South Africa.