THE PARTY HAS JUST STARTED!!LONDON, March 7 (Reuters) - Nickel prices jumped 30% to near 15-year highs and aluminium climbed to a record above $4,000 a tonne as fears of major disruptions to supplies due to financial sanctions on Russia fuelled a buying frenzy.
Russia supplies the world with around 10% of its nickel needs mainly for stainless steel and electric vehicle batteries, and accounts for about 6% of global production of aluminium, used in the transport, construction and packaging industries. [nL5N2V757N<javascript:ShowStoryDetailsDialog('nL5N2V757N');>]
Benchmark aluminium on the London Metal Exchange was up 4.1% at $4,006 a tonne at 1130 GMT, while nickel was up 31.4% at $38,000 a tonne, having earlier touched $38,500, the highest since June 2007.
"Price risks are skewed to the upside over the coming month across the metals complex," said Citi analyst Max Layton, citing supply shortages for metals produced in Russia and Ukraine.
The United States and European allies exploring the idea of banning imports of Russian oil have also spooked metals markets, which are up across the board.
Gains are also due to low inventories of aluminium and nickel in LME-registered warehouses.
LME nickel stocks , at 76,830 tonnes, are down 70% since April last year at the lowest in more than two years, and a fraction of demand estimated at around 3 million tonnes.
Aluminium stocks , at 786,475 tonnes, are close to the 15-year lows of 761,950 tonnes they hit in February.
"The continued fall in LME inventories and increased supply chain issues prompted the market's scarcity pricing," said ING analyst Wenyu Yao.
Disruptions to Russian nickel supplies exacerbating shortages pushed the premium for the cash over the three-month contract to $690 a tonne on Friday, the highest since 2007.
Russia also accounts for about 3.5% of global supplies of copper, prices of which earlier hit an all-time high of $10,845 a tonne, a gain of more than 10% so far this year.
Copper was last up 0.7% at $10,749 a tonne.
Zinc was up 3.8% at $4,206 a tonne, having earlier touched a 15-year peak of $4,248 as high energy costs in Europe raised the prospect of output cuts.
Europe accounts for around 15% of global supplies of zinc, used to galvanise steel.
Lead was up 2% at $2,508 and tin gained 1.7% to $48,340 a tonne.