LONDON: Aluminium prices in London rose on Wednesday due to worries about tightening supplies to the European Union if the bloc bans imports of the metal from Russia, though the EU’s small dependence on these imports kept the price gain modest.
Three-month aluminium on the London Metal Exchange (LME) was up 0.2% at $2,564.50 per metric ton by 1058 GMT. Reuters reported on Tuesday that the European Commission intends to propose a ban on imports of Russian primary aluminium in its 16th package of sanctions against Russia over its war in Ukraine.
The Kremlin said on Wednesday that the move would risk destabilising an already ‘fragile’ global market. The contract hit $2,602, its highest since Dec. 16, on Tuesday before retreating as it ran into producer offers. Supplies from Russia account for only 6% of the EU’s import needs in primary aluminium, said Alastair Munro, senior base metals strategist at broker Marex.
“So it is not that big and you know trade routes will be shifted,” he added. Meanwhile, US Comex copper futures continued trading at a large premium to the LME copper benchmark after the US contract’s sharp growth in recent weeks as the market prices in a likelihood of US import tariffs ahead of US President-elect Donald Trump’s inauguration on Monday.
LME copper slid 0.3% to $9,123 per ton, while US Comex copper futures rose 0.1% to $4.3485 per lb, or $9,586.8 a ton, representing a premium of $464 a ton over LME copper vs about $500 last week. A number of US commodity prices are effectively pricing in a 45-55% chance of a 10% broad tariff or 10% critical mineral specific tariff, Citi said in a note.
In other LME metals, lead was down 1.6% at $1,935 as stocks in the LME-registered warehouses rose to 239,000 tons after deliveries of 20,800 tons to a storage in Singapore. LME zinc lost 0.9% to $2,836.50, tin fell 1.4% to $29,360 and nickel slipped 0.6% to $15,850.
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