Fitch said the upgrade in its price outlook is “reflecting increased post-pandemic demand, tight markets and short-term supply disruptions, particularly due to the Russia-Ukraine conflict.”
Some commodities also benefit from increased longer-term demand due to their role in global decarbonisation, the agency said.
Fears of wider sanctions on the export of Russian commodities have sent several commodity prices to all-time highs. Trading in nickel was suspended on the London Metals Exchange (LME) last week after prices per tonne briefly topped $100,000. The exchange suspended trading and cancelled all deals from the previous few days until calm was restored on the market. Nickel was trading at $42,150 as of March 19, double the level since the start of this year.
Iron, aluminium, gold, silver and copper are all up between 5% and 17% year to date as of March 19. Oil and gas prices have also spiked, with oil trading over $100 per barrel and gas prices on the Dutch hub having touched on prices that are twenty times higher than pre-war levels.