(Bloomberg) -- Here's a good one to file under market absurdity: Russian mining stock Norilsk Nickel has been climbing this week because nickel prices rose on speculation Norilsk Nickel is under threat from sanctions.
Yes, really.
This is how it happened: First, traders sold the stock after the White House shut fellow Russian metals company United Co. Rusal out of international markets.
Metals investors then drove up the price of nickel on concern that global supply would be damaged if Norilsk -- one of the world's biggest producers of the commodity -- suffered the same fate as its Russian peer. Assessing what the jump in the metal price means for Norilsk's profits, stock traders then piled back in.
Weirder still is the confusion that's been driving some of the big moves in nickel prices. The commodity climbed as much as 12 percent on Wednesday when two of Norilsk's defunct brands were delisted. The move had been flagged months before, but jittery traders jumped to the conclusion that sanctions might be pushing the company out of the supply chain.
Read More: Nickel Gets Swept Up in Aluminum Turmoil After Norilsk Delisting
Plenty of Norilsk metal was still being supplied, just under a new label. But market players didn't immediately associate the ‘Kola' brand with the company -- even though it's named after the Arctic Circle peninsula where Norilsk's second-biggest division is based.
Come Thursday, nickel prices pared some of the gains as traders digested the supply outlook. Norilsk shares then nudged even higher likely on relief the company wasn't immediately in harm's way.
Whoever tells you markets are efficient should spend more time looking at commodities.
To contact the reporters on this story: Natasha Doff in Moscow at ndoff@bloomberg.net, Alex Nicholson in Moscow at anicholson6@bloomberg.net.
To contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Sid Verma, Samuel Potter
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