LONDON: Aluminium rebounded on Monday as investors bought back bearish positions after a US official raised the prospect of lifting sanctions on Russia's Rusal.
Cancelling sanctions on Rusal, the world's biggest aluminium producer outside of China, would ease fears of a supply shortage. However, some investors who had placed short positions in expectation of sanctions being lifted were now liquidating them, said Julius Baer analyst Carsten Menke.
"For aluminium, it's probably sell the rumour, buy the fact," Menke said.
Some consumer buying was also seen, Marex Spectron's Alastair Munro said in a note.
US Treasury Secretary Steven Mnuchin told Reuters the Treasury was open to removing Rusal from a US sanctions list, adding that the objective was "not to put Rusal out of business".
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