Aluminium extends gain over renewed Russia supply concerns

BY ONOME AMUGE

Aluminium traded higher at the close of trading activities after peace talks between Russia and Ukraine failed to secure a ceasefire in the near-four-week-old war, renewing worries over supply tightness of the light weight metal.

Dealers noted that the market is concerned that the Ukraine conflict could persist for longer, leading to refocused attention on worries about supply for aluminium and nickel, major base metals from Russia.

The value of aluminium was also buoyed by calmer conditions in top metals consumer China, where the government has launched a strategy to deal with rising COVID infections in the country, with minimal damage to the economy.

Three-month aluminium on the London Metal Exchange (LME) gained one percent to $3,418 a tonne, but was down about one percent on the week.

The most-traded April aluminium contract on the Shanghai Futures Exchange (ShFE) was up 3.3 percent to 22,810 yuan a tonne.

Commenting on China’s metal market following the COVID outbreak, Xiao Fu, head of commodity market strategy at Bank of China International, observed that people were very worried that the Asian powerhouse would suffer a sharper than expected slowdown.

Fu however noted that the situation seems to be under control now, as well as financial markets, after the regulator came in to support sentiment.

Meanwhile, market data showed that China’s aluminium imports in the first two months of 2022 were down 26.2 percent from a year earlier.

The week also ended bullish for the other base metals except nickel, which fell 12 percent to $36,915 a tonne.

Copper climbed 0.6 percent to $10,302.50 a tonne, zinc gained 0.3 percent to $3,838.50 a tonne, lead added 0.6 percent to $2,265.50 a tonne, and tin was up 1.8 percent to $42,460 a tonne.