If I Had a Nickel; Let’s Talk Commodities

  • In March, the price of nickel went vertical, surging 250% in just 24 hours. The historic short squeeze — prodded by Russia’s invasion of Ukraine (as Russia is the world’s third-largest producer nickel) — caused trading volumes to collapse on the London Metal Exchange, setting up a liquidity crisis in the market for this critical industrial commodity.
  • Output of copper has also been substantially reduced due to water shortages and worker unrest in Chile, the world’s top producer. In March, the metal reached an all time high of $5/lb.
  • Zinc hit a 14-year high in October 2021 and has held at that price, currently 11.5% above the 5-year average. Skyrocketing energy prices in Europe are further tightening up supplies as some smelters have shut down in response.
  • Since the beginning of 2020, the price of the PV-grade polysilicon used in solar panels has more than quadrupled, with fluctuations anticipated to remain through late 2023 as supply works to catch up with demand.

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