The surge in metal prices since Russia attacked Ukraine is starting to hurt some players caught on the wrong side of the market, as well as end consumers such as carmakers.
The London Metal Exchange (LME) halted trade in nickel on Tuesday after prices of the metal, a key component in electric vehicle batteries, doubled to more than $US100,000 ($137,500) a tonne.
Shell’s decision to abandon Russia comes days after it faced a hail of criticism for buying Russian oil – a transaction that two weeks ago would have been routine – underlining how Moscow’s pariah status is growing even in a market it used to dominate.
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one, and we are sorry,” chief executive Ben van Beurden said.
Although no sanctions have yet forced such divestments, Shell and rivals BP and Exxon Mobil have all announced plans to sell holdings in Russia and exit the country, leaving France’s TotalEnergies relatively isolated in hanging onto its investments there.
Hybrid delays
Dozens of companies have shut down activity in Russia since its invasion of Ukraine, which Moscow has termed a “special military operation” aimed not at occupying territory but at destroying Ukraine’s military capabilities.
German sportswear maker Adidas, cosmetics firm Estee Lauder, and Calvin Klein and Tommy Hilfiger owner PVH Corp are among the latest brands to announce the suspension of activities there.
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one, and we are sorry,“: Ben van Beurden, chief executive officer of Royal Dutch Shell.Credit:Bloomberg
The conflict has roiled global stock markets as investors have worried about its economic fallout, putting in doubt market listings, including that of Malaysia’s Top Glove Corp Bhd.
It has also driven a surge in commodity prices, which mining group BHP warned could spill over into already skyrocketing inflation and potentially affect global growth.
Nickel prices soared when China’s Tsingshan Holding Group, one of the world’s top nickel and stainless steel producers, bought large amounts of nickel to reduce its bets that prices would fall, three sources familiar with the matter said.
Tsingshan and the LME declined to comment.
As well as high-grade nickel, the price of other metals used in car production, from aluminium in bodywork to palladium in catalytic converters, has soared, and industry supply chains have been broken.
Volkswagen said it would stop taking orders for numerous plug-in hybrid models from Wednesday, as supply chain troubles exacerbated the production delays caused by chip shortages.
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The carmaker had already halted production in Russia and has also suspended production at several factories in Germany as it has struggled to obtain components.
Orders for the plug-in hybrid versions of Volkswagen’s Golf, Tiguan, Passat, Arteon and Touareg models would be halted until further notice and delivery of already placed orders might not happen this year, the company said.
Reuters, Bloomberg
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McDonald’s to close all 847 stores in Russia as Moscow isolation deepens
Source: Philippines Alive
