Costs of metals like nickel have more than doubled.

Russia’s invasion of Ukraine continues as other countries impose sanctions and major global businesses pull out from Russia’s borders. These mounting penalties, all enforced to economically pressure Russia as punishment for their aggression, are crippling many of Russia’s major industries. Unfortunately, many of those major industries include export of particular important materials.

Russia is one of the world’s largest exporters of precious metals, with one of their most important exports being nickel. Nickel is vital to the construction of batteries, stainless steel, and other products. Without Russia’s exports, the cost of nickel has skyrocketed, with the cost of one metric ton of the stuff exceeding $100,000 on the London Metal Exchange as of this morning, which prompted a temporary suspension on nickel trading.

According to head of commodity strategy at Saxo Bank Ole Hansen, who spoke to CNBC, the massive surge in nickel costs is being worsened by existing tension in the global market brought about by the ongoing supply chain issues.

“It is a very dangerous market right now because this is a market that is not driven by supply and demand, it is driven by fear,” Hansen said.

⚠️BREAKING:

*NICKEL SURGES TO UNPRECEDENTED $100,000 ON MASSIVE SHORT SQUEEZE pic.twitter.com/LXwYzOIvPo

— Investing.com (@Investingcom) March 8, 2022

Commodity investors were previously operating under the assumption that Russia’s supply chain wouldn’t be interrupted, prompting many to attempt to short their metal stocks. With the Russian supply cut off, these investors have been left holding the proverbial bag.

“Now, suddenly a major funnel of supply from Russia has been cut off, especially in the metals space. And that basically leaves these participants holding a naked short which they simply need to get out of,” Hansen said.