LONDON: Aluminium prices surged on Wednesday after a report that the United States was considering banning Russian aluminium in response to Moscow’s escalation in Ukraine.
Three-month aluminium on the London Metal Exchange (LME) jumped as much as 7.3% to $2,400 a tonne, before paring gains to $2,306 by 1600 GMT, a rise of 3.1%.
The White House was weighing an outright ban, raising tariffs to levels so punitive they would impose an effective ban or sanctioning producer United Co Rusal, Bloomberg said, citing unnamed people familiar with the decision-making.
Russia produces about 6% of the world’s aluminium.
Last week, the LME launched a discussion paper on the possibility of banning Russian aluminium, nickel and copper from being traded and stored in its system.
Western countries have imposed sanctions on Russian banks and wealthy individuals connected to President Vladimir Putin since Russia’s invasion of Ukraine in February, but so far there are few restrictions on buying Russian metal.
Earlier, most base metals ticked lower on worries about strict COVID-19 restrictions in top metals consumer China that have dampened economic growth.
China will persist with its COVID-19 policies to guard against new coronavirus strains and the risks they bring, the official newspaper of the Communist Party warned in a commentary for the third straight day on Wednesday.
“The market had been hoping for some kind of easing in the aftermath of the Congress, but it looks like they’re putting all their efforts into maintaining these restrictions,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper slipped 0.6% to $7,549.50 a tonne despite news that miners in the world’s biggest copper producer Chile were looking at transportation alternatives after a key railway suspended transport of a major copper product due to growing theft in the country’s main mining region.
Short-term supply tightness was showing up in the premium of the LME cash over the three month contract, which rose to $91 a tonne from $42.25 last Thursday.
In other metals, LME nickel gained 1.7% to $22,460 a tonne, zinc added 0.3% to $2,937.50 and lead advanced 1.2% to $2,039, but tin declined 1.2% to $20,015—
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