LONDON: Aluminium hit its lowest in nearly two weeks on Tuesday, extending declines from the previous day after Washington gave US companies more time to comply with sanctions on Russian producer Rusal and hinted at further sanctions relief.
The US Treasury Department gave Americans until Oct. 23, instead of June 5, to wind down business with Rusal and said it would consider lifting sanctions if Russian tycoon Oleg Deripaska ceded control of the company.
"We should be getting use to the fact that Trump has a lot of bark and less bite. We've seen it with a lot of policies. He introduces them, markets react, then he backtracks or nothing comes of it or they get delayed," said William Adams, head of research at Fastmarkets.
"Aluminium is going to remain volatile depending on how the sanctions play out, but at the end of the day it will return to the range either side of $2,200 until we see evidence of stronger economic growth."
Aluminium rallied to its highest since mid-2011 last week on fears that the global market could face shortages because of the sanctions on Rusal, a company that last year accounted for more than 6 percent of global aluminium output.
LME ALUMINIUM: Three-month aluminium on the London Metal Exchange traded down 3.2 percent in official midday rings at $2,221 a tonne, having touched $2,213, its lowest since April 12. The price had dropped by 7.1 percent on Monday in its biggest one-day decline in eight years.
ALUMINIUM PREMIUMS: "This (US sanctions reprieve) certainly removed some of the acute tightness from the aluminium market, however ... raw material constraint persists," said BMO Capital Markets in a note. The U.S aluminium premium on Comex was at a three-year high of 21.5 cents per pound ($474 a tonne) on Monday.
ALUMINIUM DEMAND: Consumption of aluminium in China, the world's top user, will increase by 7-9 percent this year and next, an executive at Aluminum Corp of China (Chalco) said on Tuesday.
NICKEL PRICE: Nickel traded 0.2 percent up at $14,290 a tonne after a 3.8 percent fall on Monday. The metal hit a three-year high on April 19 on fears that sanctions might be extended to major producer Nornickel, a company linked with both Rusal and Deripaska.
NICKEL EXPORTS: The Philippines' top nickel ore producer, Nickel Asia Corp, said its 2018 export plans remain unchanged despite the government's intention to limit mining areas.
OTHER METALS: Copper traded 1.2 percent up in rings at $7,028 a tonne, zinc was last bid up 1 percent at $3,261, lead was bid up 1.5 percent at $2,354 and tin traded 0.4 percent down at $20,975.
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