Aluminum prices rose on Monday after Australia’s announcement to ban exports of alumina and aluminum ores to Russia heightened fears of a supply disruption of the lightweight metal.

The move will limit Russia’s ability to produce aluminium, one of its main exports, the Australian government has said.

“This could lead to Russia having to rely on China for any alumina shortfalls,” ING said in a note.

Russia accounts for about 6% of global aluminum supply and 10% of nickel, and is a major producer of natural gas used to generate electricity that fuels metal production.

German aluminum maker Trimet will halve production at its main plant in Essen in the coming weeks, amid huge costs for the energy-intensive production process.

Three-month aluminum on the London Metal Exchange (LME) climbed 3.7% to $3,507 a tonne at 0940 GMT, after hitting a high since March 10.

The most traded aluminum contract in May on the Shanghai Futures Exchange closed up 2.3% at 23,105 yuan ($3,635.38) a ton, after hitting its highest level since March 8.

“Traders are worried about any further supply disruptions as the war drags on,” said Kunal Sawhney, chief executive of research firm Kalkine.

“Demand for aluminum has soared globally as there is a supply shortfall that could continue to support aluminum prices in the short to medium term.”

Ukraine has defied a Russian demand for its forces to lay down their arms before dawn on Monday in Mariupol, where hundreds of thousands of civilians have been trapped in a besieged city devastated by Russian shelling.

FUNDAMENTALS

* LME copper fell 0.9% to $10,243 a tonne, lead edged up 0.1% to $2,254, zinc rose 1.8% to $3,895 and tin fell 1.4% to $41,705.

* Copper ShFE rose 0.1% to 72,880 yuan a tonne, lead fell 0.2% to 15,200 yuan, zinc gained 0.6% to 25,560 yuan and tin climbed from 1% to 337,000 yuan. The most-traded nickel contract in August fell 5.6% to 196,100 yuan a tonne, after hitting a one-week low of 195,000 yuan.

* The LME will raise its daily price limit for nickel trading to 15% from 12% as of Monday, it said.

* Barrick Gold has ended a long-running dispute with Pakistan and will now begin developing one of the world’s biggest gold and copper mining projects under a deal signed on Sunday.

* The main consumer of metals, China, kept its benchmark interest rate for business and household loans unchanged on Monday, as expected, although analysts say the case for monetary stimulus is strengthening in a context of growing external risks for an already slowing economy.

* For top metals and other news stories, click or ($1 = 6.3556 Chinese yuan renminbi) (Reporting by Eileen Soreng in Bengaluru; Editing by Uttaresh.V and Ed Osmond)


Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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