Aluminium prices surged to 22-month highs, while nickel reached seven-month peaks on Monday in response to the US and Britain’s ban on the London Metal Exchange (LME) and CME from accepting new Russian production of the two metals. Benchmark aluminium on the LME rose 2.1% to $2,546 per metric ton, with nickel up 1.6% at $18,075, as the market grapples with the potential implications of the new restrictions.
The ban on Russian aluminium, nickel, and copper produced on or after April 13, implemented by the LME to comply with new restrictions over Russia’s actions in Ukraine, has significantly impacted aluminium, given the substantial presence of Russian aluminium stocks in LME-approved warehouses. This development has contributed to a nearly 9% increase in LME aluminium prices in April, driven in part by supply concerns.
While traders and analysts anticipate a redirection of Russian aluminium and nickel to countries such as China and Turkey, the impact on nickel prices may be mitigated by growing supplies from top producer Indonesia. Additionally, many copper consumers have already sought alternatives to Russian supply.
The concern over availability on the LME has led to a narrowing of the discount for cash metal over the three-month aluminium contract, reaching a two-month low of $20 per ton, reflecting the market’s response to the evolving dynamics of metal trade and supply.