MELBOURNE: London aluminium rallied more than 2 percent on Monday and is likely to gain further on concerns that sanctions by the United States on aluminium giant Rusal could hamper trade in some 7 percent of the world's annual supply of the metal.
The United States on Friday imposed sanctions against Russian businessmen, companies and government officials, striking at associates of President Vladimir Putin in one of Washington's most aggressive moves to punish Moscow for a range of activities.
Shares of United Company Rusal Plc fell 40 percent in Hong Kong on Monday after it was included in the new list.
"Market concerns have that the sanction against Rusal and its own technical default assessment may lead to supply shortage in both aluminium and alumina," said Hong Kong broker Argonaut in a report.
Rusal produced some 3.7 million tonnes of aluminium in 2017, about 7 percent of the world's total, Argonaut said. Its annual alumina production of 11.5 million tonnes was also about 7 percent of the global total, while it produced about 4 percent of the world's bauxite, the broker said.
"It is expected that (the aluminium price rise) will extend further," Argonaut said.
FUNDAMENTALS
ALUMINIUM: London Metal Exchange aluminium rallied 2.6 percent to $2,096 a tonne by 0633 GMT, adding to a 1.6 percent gain on Friday and taking prices to the highest since March 22. On the Shanghai Futures Exchange where markets reopened after a four-day break, aluminium was up nearly 1 percent.
COPPER: LME copper climbed 0.8 percent to $6,820 a tonne, erasing Friday's modest fall. The world's biggest annual copper conference, CESCO in Chile, begins this week.
TRADE: US President Donald Trump predicted on Sunday that China would take down its trade barriers, expressing optimism despite escalating trade tensions between the world's two largest economies that have roiled global markets.
GERMANY: German exports plunged unexpectedly in February, posting their biggest monthly drop in 2-1/2 years and narrowing the trade surplus, data showed on Monday, in a further sign that growth in Europe's biggest economy could have reached its peak.
JAPAN COPPER: Japan's copper output in the first half of the 2018/19 financial year to March 31 is forecast to rise 6 percent from the year before, Reuters calculations from plans outlined by smelters showed.
INVESTORS: Copper speculators upped their net long position in copper futures and options in the most recent week data from the US Commodity Futures Trading Commission showed.
NICKEL: Shanghai nickel prices trimmed earlier losses, down 1.5 percent while zinc prices fell 1 percent, also off lows, tracking a drop in iron ore given ongoing Sino-US trade tensions.
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