Prices of aluminium soared to a record high of over 9% following the decision by the UK and the US to ban trade in Russian metals, Euronews reported.
In morning trading, the price of aluminium on the London Metal Exchange (LME), was up more than 9%, the biggest increase since trading began in 1987. Nickel prices also rose, adding over 8% at one stage.
The UK and the US decided over the weekend to impose sanctions on Russia over new aluminium, copper and nickel production in order o affect Russia’s economy. UK Chancellor Jeremy Hunt stated that the ban would “prevent the Kremlin funnelling more cash into its war machine.”
Russian metal production accounts for about 5% of global aluminium supply, 6% of nickel and 4% of copper.
A prolonged rise in metal costs could drive up prices across the economy and potentially create inflation problems. However, Goldman Sachs analysts believe the ban is unlikely to jeopardise supplies.
Russian producers can continue to sell metal to non UK/US markets – in this respect there is no immediate tightening implication or trade flow dislocation to Western markets from current structure.
Meanwhile, the price of copper remained virtually unchanged.
