Whoever first uttered the expression "May you live in interesting times" must surely have envisioned today's US metals markets.

The saying – part blessing, part curse – is an apt summation of current times. From pig iron to nickel, aluminum to steel, US pricing has soared once again on geopolitical events, supply chain strains and overall uncertainty.

Just as domestic markets began to stabilize from record price increases in 2021 and the economy was coming to terms with the realities of a post-pandemic world, inflation bit hard in the first quarter of 2022, Russia invaded Ukraine and a new COVID-19 variant emerged.

The combination of factors is roiling markets. Russia and Ukraine's conflict has had the most far-reaching impact.

The two countries accounted for about 62% of American pig iron imports in 2021, and the war has removed significant supply of the key electric-arc furnace steel feedstock for US-based steelmakers and global producers alike. About 70% of US steelmaking is EAF based.

US buyers have had to look to replace Russian and Ukrainian material since the February invasion, with Brazil picking up the bulk of that business. S&P Global Commodity Insights' Platts Brazilian pig iron export assessment nearly doubled from January to mid-March, topping $950/mt in early April.

In turn, Platts CIF New Orleans pig iron price assessment rose about 91% by mid-March – reaching $1,030/mt, the highest level since S&P Global began assessing it in January 2018. The weekly US pig iron import assessment is now down $90 from the recent peak but still elevated.

Pig iron often acts as a release valve for steelmakers when ferrous scrap prices rise. However, as pig iron prices spiked in the US, so did scrap. The Platts US Midwest No. 1 busheling price has jumped by 53% to $780/lt since early February, while the Platts TSI US Midwest shredded scrap index increased by 30% to $610/lt over the same time.

As raw materials surged, US finished steel markets witnessed a spike in prices. The Platts TSI US hot-rolled coil index increased by more than 50% in just over 30 days following the invasion, hitting a recent high of $1,500/st before easing slightly.

Supply concern boosts nonferrous pricing

Rising US prices related to Russia uncertainty aren't limited to the ferrous complex. Global nickel pricing rose by some 57% so far this year and Platts delivered nickel cathode premium has nearly doubled to 17.771 cents/lb.

In addition to Russia accounting for roughly 17% of world nickel production, inventories remain low for the material – as well as for metals such as copper, aluminum and zinc – following a global market deficit last year, according to data from the World Bureau of Metals Statistics.

As the war in Ukraine picked up steam, nickel pricing more than doubled in early March to a record high of more than $100,000/mt. The rapid rise resulted in the London Metal Exchange suspending trading and voiding an estimated $3.9 billion in trades.

The trading suspension and subsequent stoppages generated even more uncertainty. And uncertainty – whether related to supply, demand or other market dynamics – can push up prices, as has been the case in the US aluminum market.

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The Platts US Midwest aluminum transaction premium has risen nearly 32% since the beginning of the year, sitting at 39.8 cents/lb currently – a touch below an all-time high of 40.1 cents reached in late March.

The US market is the largest importer of aluminum in the world – bringing in some 75% of the primary aluminum it consumes.

Exports of primary aluminum to the US from Russia, one of the world's top producers, had been on the rise toward the end of 2021 – reaching 22,854 mt in December, before falling to just 7,348 mt in February, according to US Census data.

Much of that decline likely can be attributed to uncertainty surrounding aluminum supply from Russia. Its "most-favored-nation" trade status has been stripped by Congress and the Biden administration, and the threat remains of exports being cut off by potential sanctions or other trade measures.

At the same time, US aluminum demand remains steady, supply tight and freight rates elevated, according to market participants. Just like in other metals segments, the result has been higher prices.

China lockdown adds uncertainty

The recent COVID-19 outbreak in China has muddled things for America, as well.

Chinese aluminum smelters have been ramping up production in recent weeks on increases in both power supply and profits. However, "zero-COVID" lockdowns in some of the country's biggest cities, including Shanghai, have some wondering where the additional output will go if consumer demand there is dented.

The lockdowns mean workforces in the world's workshop are mostly homebound and some manufacturing facilities have been forced to temporarily shutter.

The COVID-related measures could mean steep declines in near-term imports by China, additional supply chain disruptions and a flood of goods seeking transport from warehouses and ports once restrictions are lifted.

Chinese aluminum supply not needed domestically could seek a home in other regions, displacing tons from those markets, causing a domino effect that would generate volatility around the world – including the US.

Some anticipate possible additional global aluminum supply could reach US shores, and question whether that – along with any shift in demand or a change in the status of US aluminum import tariffs – could push down pricing and take market participants on a new type of rollercoaster ride.

As global markets become increasingly interconnected, it's likely the blessing and curse nature of "interesting times" will become the norm for America for some time.