Commodity wrap-up for the week that was

Highlights

• A staggering jump in prices of commodities ranging from agricultural to energy products is underpinned by concerns of supply shortages.
• Among precious metals, gold, silver and Palladium have recorded substantial gains.
• Battery metals lithium and nickel have jumped in the last week due to the robust demand and supply crunch in the market.

Most of the commodities have soared in the last week as geopolitical tensions between Western allies and the Russian Federation escalated after the latter invaded Ukraine. The staggering jump in prices of commodities ranging from agricultural to energy products is underpinned by rising supply shortages concerns due to sanctions by the Western economies on Russia.

Source: Eikon Refinitiv

In the energy sector, crude oil has recorded staggering gains of more than 15% in the last week. Benchmark Brent Crude Oil hit US$139.13/bbl on 7 March 2022. WTI crude oil’s 1-month futures have gained more than 21% in the last week while natural gas futures jumped more than 8.5%.

Source: Eikon Refinitiv

Among precious metals, gold and silver prices jumped significantly as investors across the globe retracted from their investments out of equities and took positions into safe assets amid the ongoing Russia-Ukraine war. prices of gold surpassed the mark of US$2,000/oz on 7 March 2022 while silver played above US$25/oz.

Among agricultural products, wheat, palm oil, and corn have also recorded significant gains in the last week on rising supply concerns. Both Russia and Ukraine account for nearly one-fourth of the world's total wheat export and escalating tension between both nations soared wheat prices to 14-year highs on Friday. Additionally, supply constraints have also pushed prices of corn as Ukraine is among the world's top four suppliers of corn, as per records of the Observatory of Economic Complexity.

Source: © Bradcalkins | Megapixl.com

In addition to this, industrial metals aluminium is currently trading at all-time highs. Prices of base metal have surged above ~10% in the last week while tin has jumped ~6%. At the same time, zinc prices also surged staggeringly by ~10% in the last week ending 4 March, due to rising supply concerns amid rising tension between Russia and Ukraine.

Base metals iron ore and copper prices also jumped in the subsequent week. Copper prices surged to an all-time high level on Friday. Simultaneously, Iron Ore Fine China Import 62% gained nearly 7.25% in the last week on expectations of increased demand in China. The war has disrupted supplies of steel precursor from Ukraine and Russia.

Nickel prices reached its 14-year highs on Friday. The prices surpassed US$29,600 per tonne, recording a weekly gain of more than 15% as supply woes intensified amid aggravating tensions between Russia and the West over Ukraine. Lithium, another important battery metal, is hovering at an all-time high of 490,000 yuan per tonne, recording a magnificent ~600% yearly gain due to rising demand and ongoing supply crunch in the market.

Against this backdrop, let's skim through a few commodities that were popular among traders in the past week.

Data Source: Eikon Refinitiv

Here are a few significant commodities that recorded substantial volatility during the last week.

Crude Oil

Crude oil prices recorded substantial gains during the last week on rising supply concerns after Western allies including the US and the European Union imposed sanctions on Russia. The prices also got support as Western allies along with Japan blocked certain Russian banks from the SWIFT payments system, a secure messaging system that facilitates rapid cross-border payments and simplifies international trade.

Nickel

Source: © Martinleber | Megapixl.com

Nickel prices hovered to an all-time high on Friday as supply concerns rose amid rising tensions between Russia and the West over Ukraine. Russia is a major producer of nickel and Western sanctions on Russia created a major supply disruption in the international market.

Copper

Copper prices reached an all-time high level on Friday amid lingering worries of supply disruptions due to war in Ukraine and historically low inventories. Chile, the world’s largest copper producer, has recorded its lowest January output since 2011 with production tumbling nearly 15% relative to December 2021 figures.