Aluminium hits near 7-year peak; nickel rallies to 3-year top

LONDON, April 18 (Reuters) – Aluminium hit its highest in nearly seven years on Wednesday amid growing supply concerns in the aftermath of U.S. sanctions on Rusal, while nickel hit a three-year peak on technical factors and fears over additional Russian sanctions. Overnight, global miner Rio Tinto flagged possible downward adjustments to its 2018 aluminium output following sanctions on its Russian partner Rusal. Concerns over the impact of sanctions on Rusal, which began on April 6, have pushed up aluminium up 25 percent so far. “What’s happened in the last couple of weeks is unprecedented,” said Macquarie analyst Vivienne Lloyd. “Ex-China will be in a deficit of about 5 million tonnes if no Rusal material can be used. Even if you add Chinese (semi manufactured) aluminium exports to the mix, we’re still in deficit of 3.3 mln tonnes ex-China if you eliminate Rusal.” Some traders and analysts were puzzled about the surge in nickel, attributing it to technical factors, although the market has been fearful recently that the U.S. sanctions could extend to hit Russia’s Norilsk Nickel. “We have seen a consistent CTA (black box fund) bid of late. Nickel exhibits the largest spec long of the complex on our estimates at 10.5 percent of open interest,” broker Marex Spectron said in a note. PRICES: Three-month aluminium on the London Metal Exchange hit its highest since August 2011 at $2,529.50 a tonne, and traded up 4.9 percent in official midday rings at $2,522. Nickel hit its highest since January 2015 at $15,195, and traded up 5.1 percent in rings at $14,950. ALUMINA: Prices of alumina, the raw material for making aluminium, have surged after Rio Tinto said it could not fulfil supply contracts because of the sanctions on Rusal. Broker SP Angel said the Rio statement and Rusal sanctions only exacerbate global alumina supply constraints. “A source at a smelter … saying ‘phones have been ringing off the hook with people looking for extra metal. They are looking for any extra tonnes, even just a few hundred’.” SANCTIONS: Russian news agencies said U.S. President Donald Trump’s administration had informed the Russian embassy in Washington that the United States had no immediate plans to impose new sanctions. U.S. ALUMINIUM: U.S. aluminium prices have soared and are expected to diverge from those traded on the LME after the U.S. imposed sanctions on Rusal. INDONESIA EXPORTS: Indonesia exported 8,637,595 tonnes of nickel ore up to March 31, 2018 since its ore export policy was revised in January 2017. NORNICKEL: Russia’s Norilsk is in talks with battery makers over possible investment in its mining assets. TIN: Indonesian PT Timah estimates around 3,000 tonnes of tin shipments have been held up since March 6 as the company has been unable to get government export approval. OTHER METALS: Copper traded up 1.5 percent in rings at $6,981 a tonne, zinc traded up 1.4 percent at $3,197.50, lead was last bid up 1.2 percent at $2,378 while tin traded up 0.2 percent at $21,525.