LONDON: Aluminium prices hit a one-month low on Monday after inventories in Shanghai jumped and the United States did not impose sanctions on Russian metal.
Benchmark aluminium on the London Metal Exchange was up 0.4% at $2,185 a metric ton at 1444 GMT from an earlier session low at $2,175 as traders and consumers bought to lock in lower prices.
Prices of the metal used in the power, construction and transport industries hit a three-week high last week in anticipation of a US package of sanctions against Russia, including metals.
“It doesn’t make sense for the US to hit aluminium because the Russians will retaliate. Russia could restrict PGM (platinum group metals) exports and hurt the auto industry,” said Liberum analyst Tom Price.
“Normally at this time of year you see inventories of copper and zinc in Shanghai expand. It’s odd seeing aluminium and nickel rise as well. It’s probably metal being released back to the market by speculators.”
Aluminium stocks in warehouses monitored by the Shanghai Futures Exchange jumped 65.6% last week to the highest since last May at 173,482 tons.
Nickel inventories in ShFE warehouses rose 11% to at 17,758 tons for the highest level since December 2020.
LME nickel, which had climbed on some expectations of sanctions on Russian metal and worries about supplies from major producer Indonesia, was down 1.4% at $17,255 a ton. Russian nickel accounted for 200,000 tons, or nearly 6%, of global supplies last year, according to US Geological Survey (USGS).
Russian aluminium, at 3.8 million tons, amounted to nearly 6% of global supplies last year, according to USGS.
Elsewhere, copper fell 1.1% to $8,472 a ton, partly owing to rising stocks in LME-registered warehouses after months of declines.
The focus this week is on inflation data from the United States on Thursday for indications on when the Federal Reserve might cut interest rates, which would weaken the dollar.
A weaker US currency makes dollar-priced metals cheaper for holders of other currencies.
In other metals, zinc gained 1.1% to $2,432 a ton, lead slipped 0.2% to $2,091 and tin was down 1.3% at $26,050.