27 January 2022 – The EU is moving to the next level of escalation in the trade dispute between Lithuania and China by taking the case to the WTO. Aluminium continues to maintain its upside momentum. Palladium prices rise due to tensions with Russia – what happens to nickel now? And US dollar drops commodity prices slightly after Fed meeting – nickel and aluminium on the LME already up again.
EU takes trade dispute between Lithuania and China to the WTO
The EU wants to take the smouldering trade dispute with China concerning EU member Lithuania to the WTO. Lithuania has been diplomatically reprimanded by China for its attitude towards Taiwan and has been struggling with trade restrictions, albeit not officially, ever since – we reported.
WTO trade dispute could take years
Even if the EU now takes the matter to the WTO, such a trade dispute could take years and quickly stall. This shows once again how blunt the teeth of the World Trade Organisation actually are at the moment.
Aluminium with upside momentum
Aluminium not only showed its strong side in 2021, but also used the first weeks of 2022 to extend its lead. Currently, there are also indications that this upside momentum could continue after the Chinese holidays. Chinese aluminium inventories have fallen steadily over the past seven weeks. And on the LME, too, it went down to historic lows.
Investors on the hunt for palladium
Concerns about an escalation of tensions with Russia have caused palladium prices to rise significantly in recent weeks. Today alone by more than 6%. Since the beginning of the year even by more than 25%. The world’s largest palladium producer (approx. 41% market share), which is also responsible for 14% of global nickel production, is the Russian company Norilsk Nickel.
Nickel still in demand and in short supply
If investors are already worried about the availability of palladium, this could also have an impact on the nickel price very soon. This is because nickel is also in extremely short supply, as recently shown by price peaks of over $ 24,000 per tonne. A shortfall of Russian nickel due to political tensions or even sanctions could therefore put enormous pressure on the market price.
US dollar stronger after Fed meeting, commodities adjust
After yesterday’s Fed meeting, which did not result in any direct interest rate hikes and which are now not expected until March 2022, the dollar rose. This also directly triggered a few adjustments in commodities – crude oil and corn fell slightly. Nickel and aluminium, however, have already turned positive again after minimal losses at the start of trading on the LME.
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