London aluminium on Thursday rose from the previous session’s near two-week low, on mounting worries over Russian supplies of the metal used in transport, construction and packaging industries.
Three-month aluminium on the London Metal Exchange was up 1.6% at $3,395.5 a tonne by 0735 GMT. Prices touched $3,300 in the previous session, their lowest level since Feb. 25.
“Aluminium remains elevated _ The attack on Ukraine has been a massive driver of the surge we’ve seen there because things are escalating quickly with effects on supply chains as repercussions from this war,” said Matt Simpson, senior market analyst at City Index.
“If we do see prices staying at high levels, that’s going to have a debilitating effect on the future demand and company profits.”
Russia’s war in Ukraine entered the third week on Thursday, with none of its key objectives reached, while Western-led sanctions on Moscow tightened.
Rio Tinto, on Thursday became the first major mining company to announce it was cutting all ties with Russian businesses.
Meanwhile, benchmark nickel trading on the LME remained suspended after a short squeeze fuelled prices to top $100,000 a tonne on Tuesday.
China’s Shanghai Futures Exchange has also suspended the trading of some nickel contracts for one day, beginning from the night trading session on March 9, as it looks to tame price volatility.
Russia accounts for about 6% of the global supply of aluminium and 10% of world nickel needs. It is also a major producer of natural gas used to generate electricity that powers production of metals such as aluminium and zinc.
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LME copper rose 0.9% to $10,096 a tonne, lead was up 1.1% at $2,432, tin fell 1.1% to $43,700 and zinc dipped 0.5% to $3,920.
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The most-traded April copper contract on the Shanghai Futures Exchange ended daytime trading down 1.1% at 71,940 yuan ($11,383.09) a tonne.
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ShFE aluminium fell 0.9% to 21,735 yuan a tonne, zinc was down 3% at 25,555 yuan, lead dipped 2.3% to 15,185 yuan and tin slipped 9.2% to 337,500 yuan.
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“Onshore base metals continue to appear to be in a state of general risk-off,” broker Marex said in a note.
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The London Metal Exchange (LME) said on Wednesday it would not charge transaction fees on all nickel trades executed during a trading halt necessitated by an unusual spike in prices.
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The LME should keep nickel trading suspended until price stability can be guaranteed, the European Steel Association (Eurofer) said.
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