March 21 (Reuters) – Aluminium prices jumped more than 5% on Monday after Australia banned the export of materials used to make the metal to Russia as part of its sanctions against Moscow for its invasion of Ukraine.
Meanwhile, the London Metal Exchange’s benchmark nickel CMNI3 contract fell to $31,380 a tonne, hitting its lower trading limit, now set at 15%, for a fourth session in a row, on selling triggered by expectations of falling prices for the metal.
The LME suspended nickel trading on March 8 after prices spiked by more than 50% to over $100,000 a tonne. It resumed trading on March 16 but has adjusted the trading limit down each day since then.
Benchmark aluminium CMAL3 was up 3.7% at $3,507 a tonne at 1114 GMT after earlier touching $3,554, its highest level since March 10.
Australia imposed an immediate ban on exports of alumina and aluminium ores, including bauxite, to Russia.
“Taken together with disrupted exports from Ukraine, Russia’s smelters are facing a significant supply shortfall of raw materials,” said Julius Baer analyst Carsten Menke.
“While the ban could be seen more as a symbolic sign, as Russia anyway struggled to sell its aluminium, the news is likely to be taken positively by the market.”
NICKEL: Expectations are for nickel prices to fall until they reach the levels on the Shanghai Futures Exchange (ShFE) after an adjustment for costs such as transport, insurance, import duty and other fees.
Nickel on ShFE SNIc1 was trading around 205,670 yuan or $32,390 a tonne.
CUTS: Germany-based TRIMET will over coming weeks cut aluminium production at its Essen facility by 50% because of higher energy prices after Russia invaded Ukraine.
“The amounts aren’t large, but it does raise the prospect of further aluminium production cuts in Europe,” a trader said.
Global aluminium consumption is estimated at around 70 million tonnes this year.
INVENTORIES: Stocks of aluminium MALSTX-TOTAL in LME registered warehouses at 704,850 tonnes, down from near 2 million tonnes a year ago, have also fuelled bullish sentiment.
Cancelled warrants — metal earmarked for delivery — at 34% suggest more aluminium is due to leave the LME system over coming days.
OTHER METALS: Copper CMCU3 was down 1.1% at $10,216 a tonne, zinc CMZN3 gained 2% to $3,902, lead CMPB3 slipped 0.1% to $2,251 and tin CMSN3 lost 0.6% to $42,055.
