SHANGHAI, Mar 2 (SMM) – Three-month LME aluminium climbed toward a record high on Tuesday, as mounting sanctions on Russia sparked concerns about aluminium supplies from Rusal. The worries about shipping disruptions pushed up nickel prices at the same time.
In response to Russia's military operations in Ukraine, US and some Western countries have successively announced the sanctions, which could disrupt shipments of commodities such as aluminium and nickel from Russia.
Rusal has halted the production at Nikolaev alumina refinery in Ukraine, citing impeded logistics in and around the Black Sea.
"The key risk to the aluminium market is that a reduction in alumina supply will eventually lead to the suspension of primary aluminium smelting in Russia, including 900,000 mt of annual production capacity," Goldman analysts said in a note.
The disruption of routes to and from Russia could break off the global nickel supply, according to nickel market sources. About 10% of the world's nickel supply used to produce stainless steel and electric vehicle batteries comes from Russia.