The US plans to announce a “significant” sanctions plan against Moscow on Friday.
The Zhitong Finance App learned that aluminum prices have soared because the market speculates that a new round of US sanctions against Russia may target this metal, which may disrupt supply. US President Joe Biden said the US plans to announce “significant” sanctions against Moscow on Friday, although he did not specify which industries would be affected. His remarks have sparked speculation that Russia's huge metals industry may be curtailed, as these industries have so far escaped widespread US sanctions even though the UK has imposed restrictions.
Aluminum futures prices rose more than 2% in early Wednesday trading after Biden's speech.
Li Jiahui, an analyst at Shanghai Nonferrous Metals Network, said: “Biden's news has led to price increases, and investors are evaluating potential measures and impacts.” “Investors are awaiting specific measures.”
Biden said sanctions will be announced in response to the death of Russian opposition leader Alexei Navalny. US National Security Adviser Jack Sullivan said the measures would target Russia's “defense industry base” and other countries' sources of economic revenue.
After the Russian-Ukrainian conflict broke out in February 2022, the price of aluminum once rose to a record level of more than 4,000 US dollars per ton. At that time, most sectors of the Russian economy and many well-known officials were suppressed by countries led by the US.
In December of last year, the United Kingdom took action to ban British individuals and entities from trading Russian physical metals such as aluminum, copper, and nickel. At the time, Britain also hinted at the possibility of coordinating actions with international partners. The reason why UK policy is important is because the London Metal Exchange plays an important role in the global metals market.
On Wednesday morning, the price of LME aluminum rose 2.5% to $2247.50 per ton. The price of nickel rose 0.6% and the price of copper rose 0.4%.