Aluminum ends the week lower on price correction

LONDON — Aluminum fell to its lowest in a week on Friday and ended the week in negative territory as the market corrected after a recent price surge on US sanctions against the world’s largest producer and its major shareholder.

Benchmark aluminum on the London Metal Exchange (LME) slipped 2% to $2,288 a ton, its lowest since May 3. The price in the light metal rallied to a nineyear high last month.

Washington last month announced sanctions on Russian billionaire Oleg Deripaska and several companies in which he is a large shareholder, including Rusal.

“It’s a continued correction from the multi-month high we have seen in April,” said Commerzbank analyst Daniel Briesemann, adding the aluminum price reaction to US sanctions had been exaggerated.

“The news will dictate the price. However, over the next few weeks or month I would definitely say the correction would continue.”

US SANCTIONS: Glencore and United Company Rusal have asked the London Metal Exchange to temporarily lift its suspension on Rusal’s aluminum after an extension of the deadline for companies to wind down contracts with the Russian firm under US sanctions, sources said.

RUSAL: Russian aluminum giant Rusal on Friday warned of expected harm to its business from US sanctions, sending its share price lower despite the company reporting a 20% jump in first-quarter core profit.

STOCKS: On-warrant stocks in aluminum — those not earmarked for delivery — fell by 3,250 tons to 860,700 tons. They have shed 18% since April 16 to the lowest levels since early February, while headline stocks are down 11%.

CHINA LENDING: Chinese banks extended 1.18 trillion yuan ($186.4 billion) in net new yuan loans in April, up slightly from March and higher than expected, as policy makers look to support the economy in the face of fresh risks from US trade threats.

Signs of more lending in China, the world’s top consumer of metals, should generally support prices.

EGA: Emirates Global Aluminum’s stock market listing is likely to slip to 2019 because of turmoil in global aluminum markets after the US sanctions on Rusal, three sources familiar with the deal said.

JAPAN SUPPLY: Japanese copper miners JX Nippon Mining & Metals and Sumitomo Metal Mining plan to increase output from their mines in Chile this year but face challenges in bringing them to full capacity and meeting profit targets.

INDONESIA: Indonesia’s ministry of energy and mineral resources has issued a decree requiring special mining permit holders producing for at least five years to divest 51% to Indonesian entities by 2019.

PRICES: Copper ended 0.30% lower at $6,940 a ton, lead finished 1.7% down at $2,345, tin added 0.80% to $21,000, zinc was flat at$3,085 and nickel rose 1.3% to $14,055. —