Aluminum and nickel rose on Thursday, buoyed by buying triggered by the possibility that the London Metal Exchange (LME) will ban new supplies of the Russian metal from the list of marks that can be delivered against exchange contracts.
The benchmark aluminum contract rose more than 8.5% to $2,305 a tonne, hitting its highest level since September 19, while nickel at one point gained as much as 6% to $23,115. .
Sources said the LME is scheduled to discuss a ban on nickel produced by Nornickel – which accounted for 7% of global output mined, estimated at 2.7m tonnes last year – and aluminum produced by Rusal.
Rusal, the world’s largest aluminum producer outside of China, accounts for 6% of global supply, estimated at some 70m tonnes this year.
Rusal and Nornickel did not immediately respond to requests for comment.
Western countries have imposed sanctions on Russian banks and wealthy people linked to President Vladimir Putin since Russia’s invasion of Ukraine, but so far there are no restrictions on buying Russian metal.
A ban on the Russian metal could lead to shortages and further price rises at a time of rising inflation around the world.
The suspension of new deliveries of Russian metal would exacerbate shortages in already tight supplies, fueling a jump in prices similar to that seen after the US Treasury Department imposed sanctions on Rusal and the LME delisted its aluminum in 2018. .
Aluminum prices soared 30% in just days after the move.
Other LME-traded industrial metals also rose on a buying spree triggered by gains in aluminum and nickel.
Among other industrial metals, copper rose 1.6% to $7,540 a tonne at, aluminum climbed 3.4% to $2,195, zinc added 3.3% to $2,948, lead gained 2.1% to $1,875, nickel advanced 2.4% to $22,340 and tin fell 0.9% to $20,540.