LONDON: Aluminium prices climbed on Tuesday, shrugging away gloomy sentiment weighing on financial markets, on concern about supply from major producer Russia due to rising tensions over Ukraine.
Russia's Rusal is one of the world's biggest producers of aluminium and prices rocketed in 2018 to seven-year highs when the United States imposed sanctions on the company.
Three-month aluminium on the London Metal Exchange had gained 1.6% to $3,076 a tonne by 1130 GMT, a sharp contrast to losses in most other metals.
"As we saw a few years ago when there were sanctions on Rusal, the price shot up. So if there are sanctions placed on Russia because it does invade Ukraine, it could imperil supply of many metals, including aluminium," said independent consultant Robin Bhar.
LME copper may test support at $9,798 this week
"Also because of the energy crunch in China and in Europe, we've had 700,000 tonnes per year of output that's already been curtailed."
Russia said on Tuesday it was watching with great concern after the United States put 8,500 troops on alert to be ready to deploy to Europe in case of an escalation in the Ukraine crisis.
Global financial markets were nervous about the rising tensions over Ukraine and ahead of a meeting of the US Federal Reserve. World stocks are set for their biggest monthly drop since the pandemic hit markets in March 2020.
Most base metals extended their decline after sharp losses on Monday.
In China, the March nickel contract on the Shanghai Futures Exchange dropped by as much as the session's 8% lower limit to 163,460 yuan ($25,823.88) a tonne.
LME nickel edged down 0.2% to $22,350 a tonne after diving 6.8% on Monday.
The metal used to make stainless steel and chemicals for electric vehicle batteries touched $24,435 a tonne last week, the highest since August 2011.
Rio Tinto Plc and the Mongolian government said on Tuesday they have reached an agreement to end a long-running dispute over the $6.93 billion expansion project for the Oyu Tolgoi copper-gold mining project.
LME copper shed 0.5% to $9,680.50 a tonne, lead dropped 0.4% to $2,349.50, tin slumped 3% to $41,290, but zinc added 0.2% to $3,601.50.
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