Market focus on Rusal taking stock of aluminum prices of listed companies in China, Russia and the United States

SMM April 11: Rusal sanctions by the United States has become the focus of the entire market, with the geopolitical risks in Syria, the market can be said to be filled with smoke.

Us metal manufacturing stocks surged across the board after the US announced sanctions against Russia, with Century Aluminum leading the way up more than 12 per cent, Alcoa up 5.35 per cent and Kaiser Aluminium up 1.01 per cent. There are fears that US sanctions against Rusal and its own technical default assessment could lead to shortages of aluminium and alumina.

SMM believes that domestic demand for raw materials in the United States is at risk of tight supply, and that such sanctions may lead to a redistribution of international supply of aluminum ingots, giving a clear boost to aluminum prices in North America, particularly local spot water.

Rusal shares in Hong Kong suffered a "black Monday" on April 9, plunging 50.43 per cent in a single day. Rusal shares closed 8.7 per cent lower at HK $2.10 a share on the day after the sanctions were officially announced or caused a technical default, their lowest level since 2016. En+, the London-listed parent company of Rusal, and Rusal, which is listed in Moscow, also fell sharply.

Rusal announced earlier on the Hong Kong Stock Exchange that the London Metal Exchange (LME) had issued a notice following last week's impact of US sanctions on Rusal. According to the circular, with effect from April 17, unless the non-metallic owner can prove that LME is satisfied that it will not constitute a violation of United States sanctions, Otherwise, any Rusal brand of raw aluminum ingots will not be approved as a metal listed in a registered warehouse receipt (delivered to a warehouse approved by LME). Rusal is currently assessing the impact of the circular and will issue a separate announcement as soon as possible after further assessment of the situation.

Also on Tuesday, Chicago Mercantile Exchange Comex also said Rusal would not be allowed to deliver on the exchange. Comex issued a statement and said the withdrawal of guarantees and deliveries to Rusal and its subsidiaries would take effect immediately.

LME,COMEX added fuel to the fire at this point in time, and Glencore CEO Glasenberg resigned from Rusal's board.

The share prices of listed domestic aluminum companies rose with the rise in aluminum prices this week. by the end of the morning of April 11, 2018, Changal shares had closed up 12.65 percent, Cloud Aluminum shares had risen 8.68 percent, and Jiaozuo Wanfang had closed 2.02 percent higher. Nanshan Aluminum closed up 3.5 per cent in the week.

At present, the aftermath of the sanctions imposed by the United States on Rusal continues to affect the market, paying attention to Rusal's further evaluation of the LME announcement and the progress of the Sino-Russian-US tripartite trade game.