LONDON: Aluminium prices retreated on Friday from record levels on easing fears about power supply after Russia's energy sector was excluded from Western sanctions and as some traders withdrew ahead of the weekend.
Aluminium, the most energy-intensive metal to produce, had soared on fears about spiking power costs and worries that supply from major producer Russia would be hit after it invaded Ukraine.
Three-month aluminium on the London Metal Exchange slipped 2.3% to $3,315 a tonne by 1115 GMT, easing off a record high of $3,480 touched on Thursday. On a weekly basis, prices are up 2.3% so far.
"Given the fact that the sanctions did not really impact energy flows, did not impact (President Vladimir) Putin personally, that risk premium is being deflated somewhat," Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Aluminium rockets to record high on fears of disruptions to Russian supplies
"Anyone who trades this on a short-term tactical perspective will take this opportunity to lock in some profit ahead of the weekend, a two-day trade break when a lot of things can happen."
The United States, Britain and other Western nations have hit Russia with new sanctions, but a US official said Washington's sanctions "are not targeting and will not target oil and gas flows".
Russia produces about 6% of the world's aluminium and accounts for about 7% of global nickel mine supplies.
It is also a major producer of gas used to generate electricity, a major component of aluminium production.
LME nickel fell 2.2% to $24,175 a tonne after hitting its highest since 2011 in the previous session.
LME copper edged 0.3% lower to $9,832 a tonne, zinc dropped 0.9% to $3,608.50 and tin lost 0.3% to $45,050, but lead bucked the trend, rising 1% to $2,366.
The London Metal Exchange is ready to ensure market stability if sanctions by Western allies impact trading of key industrial metals produced by Russia such as aluminium and nickel, the LME said on Thursday.
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