LONDON: Aluminium rose on Friday but was down nearly 10% this week amid heightened market volatility after uncertainty about exports from Russia pushed prices to record highs.
Russia produces around 6% of the world’s aluminium and is a major producer of copper and nickel, precious metals, energy and crops.
Since Moscow sent troops into Ukraine on Feb. 24, many banks and shippers stopped handling Russian commodities, creating a supply shock that sent prices sharply higher.
Benchmark aluminium on the London Metal Exchange (LME) was up 2.1% at $3,499.50 in official trading.
The metal, used in transport, construction and packaging, see-sawed from around $3,300 on Feb. 23 to $4,073.50 on Monday and back to $3,300 on Wednesday.
Aluminium is still up around 25% this year after rising 42% in 2021, when a supply deficit began to form.
“There is across commodities markets some confusion about where prices should be,” said WisdomTree analyst Nitesh Shah. “If this (war in Ukraine) is a protracted conflict, a lot more supply will probably get hurt.”
NICKEL: Trading on the LME remained suspended after a price surge earlier this week.
SUPPLY: The jump in energy and coal prices could constrain output of energy-intensive aluminium smelters in Europe and Asia, analysts at ANZ said, worsening supply shortages.
INVENTORIES: Stocks of aluminium in LME-registered warehouses have fallen to 755,950 tonnes from almost 2 million tonnes a year earlier.