LONDON: Nickel prices rose to their highest in 10 weeks on Thursday as concern over expansion of US sanctions against Russia triggered covering of bets on lower prices of the metal used in stainless steel and electric vehicle batteries.

Three-month nickel on the London Metal Exchange was up 1.6% at $17,195 a metric ton by 1125 GMT after touching its highest since Dec. 15 at $17,200 and breaking through the 100-day moving average of $17,052.

“It is all concerns around sanctions, so really just a risk-off (move),” one trader said. US President Joe Biden said that Washington plans to announce a major sanctions package against Moscow on Friday.

Russia, a major producer of refined nickel, palladium and aluminium, is approaching the two-year anniversary of its invasion of Ukraine on Feb. 24. Western leaders have also expressed outrage at the news from Russian authorities that Russian opposition leader Alexei Navalny died in prison last week.

Despite the market reaction, the real impact on the supply and demand from any possible sanctions on Russian base metals would be limited because the US reduced Russian imports after imposing high tariffs on them a year ago. The nickel market is also oversupplied because of rising production in Indonesia.

Other LME metals registered modest moves as markets reopened in top metals consumer China after the Lunar New Year holiday. “Sentiment remains focused on the US Federal Reserve messaging and the timing of interest rate cuts, coupled with fears over the health of China’s real estate sector and stimulus expectations,” said Standard Chartered analyst Sudakshina Unnikrishnan.

The macroeconomic situation would improve for base metals in the second half of 2024, leading to higher prices across the complex apart from nickel, Unnikrishnan added.

In other metals, LME aluminium lost 0.1% to $2,216.50, copper firmed by 0.1% to $8,550.50, zinc added 0.1% to $2,396, lead dipped 0.2% to $2,073 and tin was down 0.7% at $26,105.