By: Natalie Scott-Gray, Senior Metals Demand Analyst, EMEA and Asia region
• On Monday (21st February), President Putin officially recognised both Luthansk and Donetsk as independent separatist republics and singed an order for the Défense Ministry to send in “peacekeeping forces”, while also demanding that Kyiv stop all military action immediately or bear full responsibility for “the possible continuation of bloodshed”. Please note, both regions have largely been controlled by Russia-backed separatists since 2014 and as it stands, Russian military forces will be allowed to build bases within the separatists’ held areas of each city.
• On Tuesday (22nd February), the European Union, the United Kingdom, the United States, Germany, Japan, Australia, and Canada all announced a first ‘tranche’ of sanctions upon Russia, with the understand that more severe sanctions will be implemented if the crisis escalates further.
Global Sanctions Imposed:
UK
Sanctions on five Russian Banks (Bank Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank), alongside sanction on high-net-worth individuals (including Gennady Timchenko, Boris Rotenberg and Igor Rotenberg). More sanctions will be ready to deploy on further developments.
Germany
Operational approval on the Nord Stream 2 Baltic Sea gas pipeline project (set to double Russian gas flows directly to Germany) has been halted.
U.S.
Sanctions on two large Russian financial institutions (VEB Bank and Russia’s military bank Promsvyazbank Public Join Stock Company), in addition to their 42 subsidiaries. Meanwhile, further sanctions were placed on Russian elites and Russian sovereign debt, cutting off financing from the west (and placing them on the Specially Designated Nationals list). The Russian elites comprise of Aleksandr Bortnikov (Director of the Federal Security Service), Petr Fradkov (Chairman and Chief Executive of Promsvyazbank Public Joint Stock Company) and Sergei Kiriyenko (a former Prime Minister of Russia).
EU
Sanctions on 27 Russian elites, including all members of Russia’s Duma (or parliament’s lower
house)
Japan
Sanctions prohibiting the issuance of new Russian bonds in Japan, along with the freezing of assets and visa issuances for officials from the two regions (in addition to trade). Furthermore, several Russian individuals (not mentioned) will have their assets frozen and travel to Japan will be banned.
Please note further sanctions were implemented by Canada and Australia
Our View:
At present, the move undertaken by Russia on Monday is not being considered as a full-blown invasion of Ukraine; however, it has muddied the path for future negotiations. Indeed, despite President Putin announcing on Monday (during his meeting with the Security Council) that Russia was not considering the question of annexing the two territories, it is uncertain what lays ahead. As it stands, the first ‘tranche’ of sanctions placed upon Russia were less severe than the market was expecting, and given that no metal-specific sanctions were made, the base metals have come off recent highs.
We forecast that both aluminium and zinc face the highest risk of disruption to their markets, given the indirect impact that near-term high energy costs will play on smelter margins across Europe. (Please note, both aluminium and zinc are high energy intensive metals to produce). Nickel (and copper) additionally face a high risk of disruption, based on 6% and 5% of global supply originating from Russia respectively. However, we must point out here, that any significant future disruption would be a result of a direct impact (i.e., specific sanctions upon these industries, rather than as an indirect result of higher energy prices). Meanwhile, we forecast that lead and tin (which equally have the least supply exposure to Russia) are at the lowest risk, with lead further protected given its unique fundamental position in which two-thirds of global supply comes from secondary sources.
Aluminium Market Outlook – Key Risks
Indirect Risk
We forecast that natural gas supplies across Europe are likely to remain elevated in the near-term, particularly on the back of Germany announcing the halting of approval for the Nord Stream II Gas Pipeline (that was to double the volume of natural gas supplied to Germany from Russia). Indeed, we forecast that restarts of smelter capacity (or further curtailments), could occur beyond the winter months if energy prices remain elevated, which would push the market balance for aluminium (outside China) into a more significant deficit.
Direct Risk
Upon the scenario of a full-blown Russian invasion into Ukraine, more stringent sanctions from the west would be inevitable. In this scenario, although we don’t expect the west to target specific commodity producers or implement commodity export bans out of the country (given the unfavourable impact it would have on already high prices), there are expectations that steps will be taken to limit Russia’s exposure to capital markets. One way of doing this could be to ban Russia from using the global payment system SWIFT (The Society for Worldwide Interbank Financial Telecommunications). Indeed, if this was implemented, commodity exports out of Russia would be impeded (and given the little scope for alternative aluminium supply), our current market outlook could be derailed, with new record highs for aluminium being established. Furthermore, it is likely that Russia would seek to increase its trade with China (settling deals in RMB instead of U.S. dollars).
NICKELALUMINIUM MARKET OUTLOOK (PRE-INVASION)
This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.
The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.
References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.
StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.
R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.
StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.
This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.
StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).
SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism.
StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.
StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.
StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
© 2026 StoneX Group Inc. All Rights Reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
Natalie Scott-Gray, StoneX Senior Metals Analyst, explains how Indonesia's tightening control over mineral exports, China's upcoming Politburo meeting and new carbon regulations are reshaping the outlook for nickel, aluminium, copper and other base metals. She discusses why supply-side risks may prove more influential than broad stimulus expectations during the second half of the year.
Copper prices are back in focus as physical supply tightens, inventories decline and demand strengthens. Natalie Scott-Gray, StoneX Senior Metals Analyst, explains why the copper market is becoming fundamentally tighter, how Section 232 tariff uncertainty and China's buying patterns are reshaping global flows, and why AI, electrification and grid investment continue to support the long-term outlook despite recent weakness in technology stocks.
Indonesia's tightening grip on mineral exports is becoming one of the most important supply-side drivers for global metals markets. As export controls expand and nickel production quotas are reviewed, supply constraints may outweigh demand uncertainty during the second half of the year.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
