Copper to reach $12,500 as disruption to supplies arises from the war – UBS

Metal markets are already struggling with supply challenges due to the pandemic and higher energy prices, and thus have limited room for fresh shortfalls. This is particularly the case for aluminum, nickel, and copper, strategists at UBS report.

Commodities set to gain further

“Russia is the biggest exporter of refined aluminum, and its market share for Class 1 nickel (used for electric vehicle battery production) is nearly 20%. We have lifted our aluminum forecasts for 2022 by $100-700/mt, and we expect prices to temporarily surpass $4,200/mt this year.”

“We expect nickel prices to remain high as demand for battery production is worsened by disrupted Russian nickel supply.”

“Russia accounts for 4% of global copper production. The risks to copper supply in a tight market and the potential for greater EV adoption due to higher oil prices have led us to raise our copper forecasts by $1,000/mt across all tenors to $12,500/mt.”