Aluminium prices cool as West takes energy off Russia sanctions
ALUMINIUM PRICES RECOILED FROM RE CORDHIGH LEVELS ON EASING WORRIES ABOUT ENERGY supply after Russia’s energy sector was excluded from Western sanctions, while some dealers withdrew from trading activities.
Aluminium, the most energyintensive metal to produce, had soared on fears about spiking power costs and worries that supply from Russia, the third largest producer globally (six percent of global production), would be disrupted after it invaded Ukraine.
Three-month aluminium on the London Metal Exchange (LME) was down 2.3 percent to $3,315 a tonne, easing off a record high of $3,480 reached the previous day. The metal, however, gained over 2.3 percent on a weekly basis.
Commenting on this, Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, Denmark, said: “Given the fact that the sanctions did not really impact energy flows, did not impact President Vladimir Putin personally, that risk premium is being deflated somewhat.”
Hansen added that anyone who trades aluminium on a short-term tactical perspective will take the opportunity to lock in some profit ahead considering that a lot of things can happen within a few days.
Other base metals also closed the week on a bearish stance as nickel lost 2.2 percent at $24,175 a tonne after hitting its highest since 2011 in the previous session; copper was down 0.3 percent at $9,832 a tonne, zinc lost 0.9 percent at $3,608.50, while tin dropped 0.3 percent at $45,050 a tonne.
Lead, however, moved in an opposite direction, gaining one percent to $2,366 a tonne.
Meanwhile, the LME has stated its readiness to ensure market stability if sanctions by Western allies impact trading of major industrial metals, including aluminium and nickel.