LME aluminium prices rose on Friday but fell nearly 10 per cent this week, as market volatility intensified after uncertainty over Russian exports would push aluminium prices to record highs.
Russia, which accounts for 6 per cent of global aluminium production, is also a major producer of copper, nickel, precious metals, energy and crops.
Since Moscow's military action against Ukraine on Feb. 24, many banks and transporters have stopped processing Russian commodities, causing supply shocks and causing prices to rise sharply.
Aluminum for three-month delivery rose 1.62 per cent, or $55.50, to close at $3483 a tonne at 17:00 in London (01:00 on March 12).
Aluminum prices jumped to $4073.50 on Monday from about $3300 on Feb. 23 and fell back to $3300 on Wednesday.
Aluminium prices are still up about 25 per cent so far this year and 42 per cent in 2021, when a supply gap began to form.
"there is some confusion across the commodity market about where prices should be," said Nitesh Shah, an analyst at WisdomTree. "if this [the Ukraine war] is a protracted conflict, more supplies are likely to be hit."
LME's nickel trading remains suspended after a sharp rise in prices earlier this week.
Analysts at ANZ said the jump in energy and coal prices would limit production at energy-intensive aluminium smelters in Europe and Asia and exacerbate supply shortages.
Aluminium stocks in LME registered warehouses have fallen to 755950 tons from nearly 2 million tons a year ago.
Supply shortages have pushed up the duty premium on spot aluminium to LME prices sharply to $506 a tonne in Europe and $847 a tonne in the US.
Copper inventories in warehouses monitored by the last period fell this week, and China's copper production increased in February.
The Philippine Mines and Geology Bureau said on Friday that about 12 metal mines, most of them nickel, are expected to start production in the country this year.
