LONDON (Reuters) – Aluminium prices on the London Metal Exchange (LME) soared on Wednesday after Bloomberg reported that the United States was considering a ban on Russian aluminium in response to the conflict in Ukraine.
Benchmark aluminium was up 3.3% at $2,309 a tonne at 1612 GMT after briefly spiking 7.3% to $2,400 a tonne.
The Biden administration is considering raising tariffs on Russian aluminum to levels so punitive they would effectively ban Russian aluminium producer Rusal, Bloomberg said, citing unnamed people familiar with the decision-making.
The White House and the Treasury Department did not immediately respond to requests for comment from Reuters.
Rusal is the world’s largest aluminium producer outside China, supplying the world with 6% of its needs estimated at around 70 million tonnes this year.
It too did not immediately respond to request for comment.
A ban would almost certainly send prices soaring.
After the U.S. Treasury Department imposed sanctions on Rusal and the LME barred its metal in 2018, aluminium prices rose 30% over the course of a few days.
The LME last week launched a discussion paper on the possibility of banning Russian aluminium, nickel and copper from being traded and stored in its system.
Sources in the metal industry say there is concern that Russian metal producers will be unable to sell their metal and will deliver it to registered LME warehouses, which could distort prices.
Western countries have imposed sanctions on Russian banks and wealthy individuals connected to President Vladimir Putin since Russia’s invasion of Ukraine began in February, but so far there are no restrictions on buying Russian metal.
(Reporting by Eric Onstad and Pratima Desai; Editing by Kirsten Donovan and Barbara Lewis)
