The metal found support during the afternoon amid concerns over further sanctions, reaching a high of $15,875 per tonne, the highest since December 2014.

“I think it is fear rather than fact at this stage. Given what has happened in aluminium, and that nickel also has a significant Russian share of global production, it is not surprising that people would seek to reduce exposure to that risk,” Guy Wolf, global head of market analytics at Marex Spectron, told Metal Bulletin.

Speculation continues to mount over the metal’s sharp spike, with market sources also suggesting the LME’s delisting of Russian nickel producer Norilsk’s brands a contributing factor.

The LME had announced in October last year it will delist old Norilsk nickel brands within six months.

“There’s definitely a fear about a new round of sanctions in general against Russia, which is driving prices up. As far as we understand, no new sanctions are imminent, and I don’t really understand the price rise today if you just put it down to sanctions,” Daniel Briesmann, analyst at Commerzbank, told Metal Bulletin.

Nickel’s volumes also climbed over the afternoon, reaching 23,000 lots, the most since November 2016.

“The most important factor going forward is the entire EV issue. This morning BHP Billiton said they plan to raise output from Nickel West operations in Australia, which could lead to higher demand. However, nickel’s price rally started in the afternoon, so it is difficult to create a link there,” Briesmann added.

Aluminium’s three-month price continued to rocket throughout the day, closing above $2,500 per tonne for the first time since 2011.

The light metal’s price sentiment continues to find support after US sanctions against Russian aluminium producer Rusal.

Metal Bulletin Research has pointed to a potential overreaction regarding Rusal news, with continued overbuying a hasty response to sanctions.

Elsewhere, the complex recorded strong gains across the board.

Copper’s three-month price climbed back over $7,000 per tonne for the first time since February.

The red metal spent much of March consolidating around $6,800-6,950 per tonne after a volatile trade backdrop continued to affect price sentiment.

Zinc and lead also found support throughout the afternoon, with the former climbing 4.5% at the close.

Base metals rally 

  • The three-month copper price jumped $145 to $7,022 per tonne. Stocks increased a net 1,250 tonnes to 359,275 tonnes. 
  • Aluminium’s three-month price climbed $132 to $2,537 per tonne. Inventories increased 100 tonnes to 1,412,500 tonnes. 
  • The three-month nickel price was up $1,060 at $15,275 per tonne. Stocks were up 1,224 tonnes at 315,678 tonnes. 
  • Zinc’s three-month price increased $139.50 to $3,265 per tonne. Inventories fell 1,725 tonnes to 189,075 tonnes. 
  • The three-month lead price was up $27 at $2,377 per tonne. Stocks were down 25 tonnes at 129,375 tonnes. 
  • Tin’s three-month price was unchanged at $21,475 per tonne. Inventories were also unchanged at 2,015 tonnes.

Currency moves and data releases 

  • The dollar index was down 0.14% at 89.63. 
  • In other commodities, Brent crude oil was up 1.25% at $72.57 per barrel. 
  • In US data on Tuesday, building permits came in at 1.35 million with housing starts at 1.32 million, both above estimates. Capacity utilization was broadly on par with expectations at 78%, while industrial production gained 0.5%, besting forecasts. 
  • In the United States, the Federal Reserve will release its Beige book, while Federal Open Market Committee members William Dudley and Randal Quarles are speaking.