Aluminum Falls After U.S. Removes Rusal From Sanctions List
January 28 2019 - 2:58PM
Dow Jones News
By Amrith Ramkumar and David Hodari
Aluminum prices fell sharply Monday after the U.S. Treasury
officially removed Russian producer Rusal from its sanctions list,
stoking worries about additional metal hitting the market.
Aluminum for delivery in three months shed 2.8% to $1,867 a
metric ton on the London Metal Exchange. Prices had surged last
April after the U.S. sanctioned Rusal, the world's second-largest
aluminum producer, and majority owner Oleg Deripaska. Mr. Deripaska
is a close ally of Russian President Vladimir Putin. The company is
a key supplier of aluminum to many European companies, so the
sanctions sparked wild price swings for several days.
But aluminum fell later in the year on signs that the U.S. would
lift sanctions if Mr. Deripaska divested his majority stake. The
Treasury Department said Sunday Mr. Deripaska has delivered on that
promise, and some analysts think prices could fall further if there
are signs more aluminum will now be available to market
participants.
"Focus will be on LME stocks and whether metal that was held off
exchange would now become more visible to the market," said Edward
Meir, a consultant at broker-dealer INTL FCStone, in a note to
clients.
Fears of slowing global growth and waning demand from China, the
world's largest consumer of industrial metals, also hurt materials
prices Monday.
Most-active copper futures fell 1.8% to $2.68 a pound on the
Comex division of the New York Mercantile Exchange. On the LME,
zinc for delivery in three months inched up 0.3% to $2,680 a metric
ton. Tin was unchanged at $20,675, nickel fell 1.2% to $11,825 and
lead dipped 1.5% to $2,078.
Elsewhere, prices of iron ore surged more than 5%, with some
analysts anticipating that the deadly Friday collapse of a Vale SA
dam in Brazil could lead to lower supply of the main ingredient in
steel. The tragedy left at least 60 people dead and hundreds
missing and has plunged the world's largest producer into a
crisis.
Among precious metals, most-active gold futures for February
delivery climbed 0.4% to $1,303.10 a troy ounce on the Comex.
Stock-market volatility has pushed some analysts toward the haven
metal, which has also benefited from signs of patience from the
Federal Reserve because it struggles to compete with yield-bearing
assets when interest rates rise. Gold is at its highest level since
June.
Most-active silver futures added 0.4% to $15.765, while platinum
fell 0.5% to $814.50 and palladium dropped 2.3% to $1,289.30.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David
Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
January 28, 2019 14:43 ET (19:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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