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London nickel prices soared more than 22% on Monday, leading a rally in industrial metals, as supply fears grew in the wake of an escalating Russia-Ukraine conflict and mounting sanctions against Moscow.
Three-month nickel on the London Metal Exchange had surged 22.1% to $35,305 a tonne by 0625 GMT. Earlier in the session, it hit its highest since July 2007 at $35,500.
The most-traded April nickel contract on the Shanghai Futures Exchange jumped 12% to a record high of 210,950 yuan ($33,391.37) a tonne.
"Nickel was already in tight supply, and if a large supplier is being taken out from the market, it will have a cascading impact in the near- to medium-term," said Kunal Sawhney, chief executive officer at research firm Kalkine.
"The surge in prices is going to add further pressure on spot supply."
Premiums for cash nickel over the three-month contract have risen to $690 a tonne, the highest since 2007, indicating tight nearby supplies.Russia's invasion of Ukraine has triggered sweeping Western-led sanctions aimed at crippling the Russian economy.
"With heightened uncertainty, potential for higher interest rates and lower consumer spending in a high-cost energy environment, demand for metals may come under pressure," analysts at RBC said in a note.
Russia produces about 6% of the world's aluminium, 7% of global nickel and accounts for about 3.5% of copper supplies.
Benchmark aluminium on the LME rose to a record $4,000 a tonne and was last up 3.3% at $3,975.
FUNDAMENTALS
* LME copper rose 0.7% to $10,753 a tonne, lead was up 1.3% at $2,492.5, zinc gained 3% to $4,173 and tin climbed 2% to $48,500.
* ShFE copper gained 2.7% to 74,740 yuan a tonne, aluminium was 1.6% higher at 24,025 yuan, zinc jumped 3.4% to 26,740 yuan, lead rose 1.8% to 15,730 yuan and tin was up 4.3% at 356,510 yuan.
* China's unwrought copper imports unexpectedly rose 9.6% year-on-year during the first two months of 2022, customs data showed on Monday, as a delay in logistics pushed up imports.
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($1 = 6.3175 Chinese yuan)