London aluminium on Friday retreated from a record high touched in the previous session but held above last week's levels amid uncertainty over supply from Russia after the major metals producer was hit by more sanctions for invading Ukraine.
European Union leaders imposed new economic sanctions, joining the United States and others in taking steps including curbing Russia's access to technologies and halting its banks' access to European financial markets.
Russia produces about 6% of the world's aluminium and accounts for about 7% of global nickel mine supplies.
It is also a major producer of gas used to generate electricity, a major component of aluminium production.
Aluminium surges to record high
Three-month aluminium on the London Metal Exchange slipped 1.7% to $3,331.5 a tonne by 0800 GMT, easing off a record high of $3,480 touched on Thursday.
On a weekly basis, prices are up 2.3% so far.
While it is still unclear if Russian supplies will be directly hampered by forthcoming sanctions, supply of metals like aluminium and zinc is likely to remain subdued given sky-high energy costs, particularly in Europe, TD Securities said in a note.
A US official has said Washington's sanctions "are not targeting and will not target oil and gas flows", but oil prices remain elevated, while gas prices in Europe also spiked.
LME nickel fell 1.5% to $24,380 a tonne, after hitting its highest since 2011 in the previous session.
Worries about supplies on the LME market lifted the premium for cash aluminium and nickel over the three-month contract to $40.50 a tonne and $517 a tonne, respectively.
Fundamentals
LME copper edged 0.3% lower to $9,838.5 a tonne, lead rose 0.4% to $2,352.5, zinc dipped 1% to $3,604 and tin fell 0.6% to $44,920.
- The most-traded April copper contract on the Shanghai Futures Exchange (ShFE) ended daytime trading down 0.3% at 70,690 yuan ($11,198.42) a tonne.
ShFE aluminium fell 1.4% to 22,510 yuan a tonne, zinc eased 0.3% to 24,715 yuan, lead gained 0.8% to 15,615 yuan and tin was 0.2% lower at 335,880 yuan, having earlier hit a record of 344,960 yuan. Nickel slipped 1.9% to 174,450 yuan after hitting a record at 184,650 yuan.
The London Metal Exchange is ready to ensure market stability if sanctions by Western allies impact trading of key industrial metals produced by Russia such as aluminium and nickel, the LME said on Thursday.
Comments
Comments are closed.