Aluminium hits one-month high as EU envoys agree ban on Russian aluminium imports

LONDON: Aluminium prices hit one-month highs on Wednesday as EU envoys agreed to ban Russian primary aluminium imports in their 16th sanctions package to be adopted on Monday to mark the third anniversary of Russia’s full invasion of Ukraine.

Three-month aluminium on the London Metal Exchange (LME) was up 1.1% at $2,697 a metric ton by 1104 GMT after hitting $2,702.5 for its highest since January 20.

The Russian aluminium import ban will be phased in a year from the official adoption, EU diplomats said.

Helping to cap the reaction in aluminium prices the 27-member bloc has been reducing Russian aluminium imports since 2022 and the EU’s dependence on Russia is low, traders said.

The LME aluminium contract has been rising for four consecutive sessions, also attracting buying from Commodity Trading Advisors (CTAs), said a trader.

Further support was provided by the LME daily data which showed that total aluminium stocks in LME-registered warehouses slid to 547,950 tons, their lowest since May, after 4,000 tons of outflows.

Copper falls as short-covering evaporates

The on-warrant stocks fell to 227,775 tons after 28,850 tons in fresh cancellations, tightening the amount of metal available to the market.

The longer term effect on metals from the geopolitical front was unclear. U.S. President Donald Trump’s administration on Tuesday agreed to hold more talks with Russia on ending the war in Ukraine after an initial meeting.

U.S. Secretary of State Marco Rubio said European countries have also imposed sanctions, so they would have to be involved in talks on lifting the measures. If the conflict ultimately ended, he added, it would “unlock” opportunities for U.S.-Russian cooperation, including “some pretty unique, potentially historic economic partnerships.”

As to metals demand in the U.S., the market was focused on Trump’s threat to impose 25% tariffs on automobiles and semiconductor chips.

“Overall, the industry is struggling to work out what the near term future holds in terms of demand given all the U.S. tariff threats and potential counter measures by those being impacted,” said Ole Hansen, head of commodity strategy at Saxo Bank.

LME copper rose 0.4% to $9,513 a ton, zinc was up 0.3% at $2,893.50, nickel was steady at $15,350, tin added 0.5% to $32,910 and lead lost 0.8% to $1,981.