It’s a Great Time to Hoard Nickels

In economic-speak, the Ukraine crisis has been a “supply shock.” In English, that means that in the United States you’ll now find record-high gas prices, liquor stores devoid of Russian vodka, and … uhh … Americans heading into their local banks and politely asking for hundreds of dollars in nickels.

Let me explain. Russia supplies of the world’s high-quality nickel, which is a crucial component in everything from stainless steel to pipes to the batteries that power electric cars. But with Ukraine under siege, companies in the West have been wary of buying Russian nickel. This has increased demand for nickel from everywhere else, which, in turn, has bumped up its price on the London Metal Exchange. What happened next is as close to a Hollywood blockbuster as commodity finance can get: A,” who bet that nickel prices would fall, had to cover his mounting losses by buying back shares, shooting the stock somewhere into the exosphere. Within the span of 24 chaotic hours last week, the price of nickel rose 250 percent, forcing the London Metal Exchange to halt trading for the first time since 1985.