Aluminium sanctions convulse market as rally to $3000 forecast

Aluminium sanctions convulse market as rally to $3000 forecast

Meanwhile Rio also said yesterday it may need to update its full-year aluminium production guidance because of United States sanctions against Russian Federation.

ALUMINIUM PRICES: London Metal Exchange aluminium hit its highest since March 2012 at $US2,340 a tonne before retreating to close at $US2,285, down 1.7 per cent.

Rio Tinto which supplies bauxite to some of Rusal's refineries and buys refined alumina, said it will declare force majeure on some contracts, showing the immediate impact on Rusal's supply chain.

"As sanctions take immediate effect, the Russian supplier has been shut out of the Western financial system, crushing its share price".

Russian aluminum giant Rusal has stopped placing orders with two logistics firms that ship its exports, executives with the firms said on Tuesday, in a sign of deepening problems for the company after it was hit by us sanctions.

China's central bank unexpectedly said it will reduce the cash banks hold as reserves by 100 basis points from April 25. It was last up 4.2 percent at $14,805.




LME NICKEL: Nickel was the day's outperformer, surging nearly 5 percent at one stage to hit $14,870 a tonne, the highest since February 2015.

Apart from saying it would declare force majeure on certain customer contracts, Rio Tinto lso said on Friday it was reviewing Rusal's 20 percent stake in the Queensland Alumina refinery, Rusal's supply and offtake arrangements, bauxite sales to Rusal's refinery in Ireland and offtake contracts for alumina.

RUSAL HALTS ORDERS: Rusal has stopped placing orders with two logistics firms that ship its exports, in a sign of deepening problems for the company.

Analysts at ING said their sources reported that Chinese traders, nervous about aluminium's soaring rally in the wake of USA sanctions Russia's UC Rusal, misread a headline overnight about the London Metal Exchange delisting Nornickel brands.

ALUMINA: Prices of alumina, the raw material for making aluminium, have surged after Rio Tinto said it could not fulfil supply contracts because of the sanctions on Rusal. The US Treasury said the sanctions against seven high-profile Russian businessmen, a dozen of their companies and 17 senior government officials were linked to Russia's actions in Crimea, Syria and Ukraine.

"Rusal asked us to halt payments soon after the USA sanctions were announced as they can't access U.S. dollar accounts", a source at a Japanese company said. In Shanghai, copper gained 0.6 percent to end at 51,170 yuan. The dollar edged up.

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