Aluminum rockets to a 6-year high after US imposes sanctions on a major Russian producer

pulse

April 12, 2018 5:27 PM

Traders are concerned about supply disruptions.

Late last week, the Trump administration announced
Traders are concerned about supply disruptions.

Aluminum surged to a six-year high on Thursday following US sanctions imposed on a key Russian producer.

Last week Friday, the Trump administration announced sanctions on more than a dozen Russian entities, including United Co. Rusal, the world's second-largest aluminum producer.

Futures on the London Metals Exchange jumped by more than 4% to as high as $2,298 a metric ton.

"With an existing large deficit, and around 500kt of China's 2017 supply now subject to +50% duties, the US could find aluminum scarce in 2018, if ex-China supply is less than forecast," Credit Suisse's Matthew Hope said in a note on Thursday.

"To attract sufficient supply, its domestic price might need to climb to the world's highest, via the regional premium, to the detriment of its manufacturers."

The relationship between the US and Russia could be further strained following an apparent chemical weapons attack in Syria. President Donald Trump has condemned Russia and Iran for supporting Syrian President

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