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Aluminum Soars Past $2,500 as US and UK Sanctions Squeeze Russia

INVESTINGAluminum Soars Past $2,500 as US and UK Sanctions Squeeze Russia

The price of aluminum has surpassed USD 2,500 per ton, linked to new sanctions imposed on Russia by the USA and the UK. Over the last 30 days, the price of aluminum has increased by approximately 10%. Previously, the metal had long remained in lateral trends on global exchanges.

“Since the beginning of March, we have observed a significant rebound in the price, and the April sessions brought acceleration,” says Michał Stajniak, an expert at XTB, in an interview with MarketNews24.

Russia accounts for 5% of the global supply of aluminum, and the sanctions target new supplies, which can no longer be delivered to exchanges in London and Chicago. Trading on futures contracts will not allow the presentation of Russian metal for delivery. This is significant since 90% of the aluminum stocks on the London exchange are of Russian origin and were intended for Europe. This will still happen, but new supplies have been blocked.

“The situation is starting to resemble what happened in 2022, when investor fears that markets would be cut off from Russian aluminum supplies caused the price to rise to USD 4,000 per ton,” comments the XTB expert.

China, a major supplier of processed aluminum, is currently reducing production in its smelters, and the United States is preparing to impose higher tariffs on Chinese metal, especially since Russian aluminum may end up in China and from there to the global markets.

The same sanctions also apply to copper and nickel from Russia. Similarly, like aluminum, these metals are facing bullish price prospects.

“If Europe decides to impose similar tariffs, then prices will maintain above USD 2,500 per ton of aluminum, although it is hard to imagine them reaching USD 4,000,” summarizes Michał Stajniak from XTB.

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