LONDON: Prices of industrial metals fell on Monday as diplomatic efforts to resolve the Russia-Ukraine conflict calmed supply-disruption fears, while demand concerns in top consumer China also weighed on the market.

Benchmark aluminium on the London Metal Exchange was down 4.5% to $3,326 a tonne at 1742 GMT, having crossed $4,000 to hit a record high last week, while copper slipped 2.6% to $9,920 from an earlier two-week low at $9,866.

“Russia is a major aluminium producer and why the price went ballistic,” said Dan Smith, managing director at Commodity Market Analytics.

“Copper market sentiment is bearish as supplies are starting to ramp up. It shows some rational thinking.”

CONFLICT: Ukraine will seek to discuss a ceasefire, immediate withdrawal of troops and security guarantees with Russia after both sides reported rare progress at the weekend, despite fierce Russian bombardments.

RUSSIA: Rusal accounts for about 6% of global aluminium supplies, estimated by analysts at around 70 million tonnes this year.

CHINA: Rising coronavirus infections in China and the potential damage to manufacturing activity in the country have fuelled demand worries.

SPREADS: Concerns about slowing growth and demand globally due to Russia’s invasion of Ukraine have created discounts for cash over the three-month contracts for aluminium, copper, zinc and lead.

UNITED STATES: The Federal Reserve is widely expected to raise interest rates by a quarter of a percentage point at its policy meeting this week.

Higher interest rates are likely to subdue growth and demand and boost the US currency, which would make dollar-denominated metals more expensive for holders of other currencies.

OTHER METALS: Zinc was down 0.4% at $3,800 a tonne, lead ceded 2.8% to $2,260 and tin slipped 3.2% to $42,700 a tonne.

Nickel trading on the LME has been suspended since March 8, when prices doubled to more than $100,000 tonnes. The LME had anticipated nickel trading would restart on Friday, but the criteria for restarting had not then been met.