Aluminium jumps on Russian supply worries, nickel goes limit down again

LONDON: Aluminium prices jumped more than 5% on Monday after Australia banned the export of materials used to make the metal to Russia as part of its sanctions against Moscow for its invasion of Ukraine.

Meanwhile, the London Metal Exchange’s benchmark nickel contract fell to $31,380 a tonne, hitting its lower trading limit, now set at 15%, for a fourth session in a row, on selling triggered by expectations of falling prices for the metal.

The LME suspended nickel trading on March 8 after prices spiked by more than 50% to over $100,000 a tonne. It resumed trading on March 16 but has adjusted the trading limit down each day since then.

Benchmark aluminium traded up 4.1% to $3,518 a tonne at 1710 GMT after earlier touching $3,574, its highest level since March 9.

Australia imposed an immediate ban on exports of alumina and aluminium ores, including bauxite, to Russia.

“Taken together with disrupted exports from Ukraine, Russia’s smelters are facing a significant supply shortfall of raw materials,” said Julius Baer analyst Carsten Menke.

Russia’s Rusal, the world’s largest aluminium producer outside China, accounts for about 6% of global supplies estimated at around 70 million tonnes this year.

NICKEL: Expectations are for nickel prices to fall until they reach the levels on the Shanghai Futures Exchange (ShFE) after an adjustment for costs such as transport, insurance, import duty and other fees.

Nickel on ShFE was trading around 205,670 yuan or $32,390 a tonne.

CUTS: Germany-based TRIMET will over coming weeks cut aluminium production at its Essen facility by 50% because of higher energy prices after Russia invaded Ukraine.

“The amounts aren’t large, but it does raise the prospect of further aluminium production cuts in Europe,” a trader said.

INVENTORIES: Stocks of aluminium in LME registered warehouses at 704,850 tonnes, down from near 2 million tonnes a year ago, have also fuelled bullish sentiment.

Cancelled warrants - metal earmarked for delivery - at 34% suggest more aluminium is due to leave the LME system over coming days.

OTHER METALS: Copper was down 0.5% at $10,276 a tonne, zinc gained 2.8% to $3,933, lead added 0.5% to $2,263 and tin lost 1.2% to $41,800.