Aluminium tumbles as US extends deadline for Rusal wind-down

LONDON: Aluminium fell more than 8 percent on Monday on news that the United States has extended the deadline for companies to wind down business with sanctions-hit Russian producer Rusal.

Americans engaged with Rusal now have until Oct. 23 to close out their business with the aluminum giant, the U.S. Treasury Department said on Monday in a statement extending the time period.

“That provides quite a big window for the market to seek alternative suppliers,” said Saxo Bank’s head of commodity strategy Ole Hansen.

Aluminium rallied to its highest since mid-2011 last week at $ 2,718 a tonne on fears that the global market could face shortages as a result of the U.S. sanctions. It remains up more than 16 percent this month.

Rusal accounted for more than 6 percent of global aluminium output last year.

Nickel, which had hit a three-year high on April 19 on fears that sanctions could be extended, also fell more than 6 percent.

* LME ALUMINIUM: Three-month aluminium on the London Metal Exchange was down 5.5 percent at $ 2,334 a tonne by 1222 GMT. It had earlier hit a session low of $ 2,263, down 8.3 percent.

* RUSAL SHARES: Rusal soared by 13 percent on the Moscow stock exchange on the back of the U.S. sanctions update.

* FINANCIAL MARKETS: Gains in the dollar also weighed on base metals prices. The U.S. currency rallied to a seven-week high after a rise in the 10-year U.S. Treasury yield to within a whisker of the psychologically important 3 percent level prompted buying of the greenback.

* INVENTORIES: Aluminium stocks in LME-registered warehouses <MALSTX-TOTAL> fell by 10,525 tonnes to 1.385 million tonnes, exchange data showed on Monday. On-warrant inventories – those not earmarked for delivery – dropped by 4,100 tonnes to 935,650 tonnes, their lowest since February.

* RUSAL: Workers at one of Russia’s biggest aluminium smelters say their Siberian town is doomed unless Moscow mitigates U.S. sanctions against Rusal. Washington blacklisted the company and its billionaire major shareholder Oleg Deripaska for suspected meddling in the 2016 U.S. election and other alleged “malign activity”.

* COPPER: On-warrant copper inventories in LME-registered warehouses fell by 20,225 tonnes to 286,675 tonnes, their lowest in a month, the exchange data showed. Copper prices were down 1 percent at $ 6,921.50 a tonne.

* NICKEL PRICES: LME nickel was 5.6 percent lower at $ 14,000 a tonne, off a session low of $ 13,830.

* OTHER METALS: LME zinc was down 0.6 percent at $ 3,213.50 a tonne, while lead fell 1.3 percent to $ 2,335. Tin was down 1.7 percent at $ 21,355.