LONDON: Aluminium rose on Friday but was down 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 1.4% at $3,474 a tonne 1124 GMT.
The metal, used in transport, construction and packaging, whipsawed from around $3,300 on Feb. 23 to $4,073.50 on Monday and back to $3,300 on Wednesday.
Aluminium prices jump to their highest since 2008
Aluminium is still up nearly 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.
Premiums: Undersupply has pushed duty-paid physical premiums over the LME price sharply higher to $506 a tonne in Europe and $847 a tonne in the United States.
Russia: Russian forces bearing down on Kyiv appear to be regrouping at northwest of the Ukrainian capital.
Markets: Equities markets rose as investors clung to hopes the global economy would continue to grow.
China: Copper stocks in Shanghai Futures Exchange (ShFE) warehouses fell this week and Chinese copper output rose in February.
Nickel: About 12 mines in the Philippines should begin commercial operations this year, mostly nickel projects, the local industry regulator said.
Metals Prices: LME copper was up 1.2% at $10,233 a tonne but down around 4% this week.
Zinc fell 0.7% to $3,835 as was about 5% down this week.
Lead was up 0.9% at $2,377 but set for a 4% weekly loss.
Tin fell 0.3% to $43,600 and was down 8% this week.