Aluminum Extends Gains After Record Spike on Russia Supply Fears

  • In Business
  • 2022-09-30 10:31:11Z
  • By Bloomberg

(Bloomberg) -- Aluminum rose again after Thursday's record surge, with the London Metal Exchange's plan to discuss a potential ban on Russian metal exacerbating supply concerns while stimulus measures in China bolstered the demand outlook.

Most Read from Bloomberg

  • MacKenzie Scott Files for Divorce From Science Teacher Husband

  • Meta to Cut Headcount for First Time, Slash Budgets Across Teams

  • Top Apple Executive Is Leaving After Making Crude Remarks in TikTok Video

  • Stocks Plummet to 22-Month Low as Fed Hawks Circle: Markets Wrap

  • Marjorie Taylor Greene's Husband Files for Divorce After 27 Years

Aluminum climbed for a third day following a record 8.5% intraday gain, after Bloomberg reported the bourse plans to launch a discussion paper on whether and under what circumstances it should block new supplies of Russian metal from being delivered to its network of warehouses.

All metals moved higher on Friday, with zinc pacing gains as China stepped up measures to support its embattled property sector. The People's Bank of China and the China Banking and Insurance Regulatory Commission recently told the country's six largest banks to each offer at least 100 billion yuan ($14 billion) of financing support in any form including mortgages, loans to developers and purchases of their bonds, people familiar with the matter said.

Any move by the LME to block Russian supplies could have significant ramifications for the global metals markets, as the country is also a major producer of vital materials including nickel and copper.

The biggest impact would be on aluminum, as about half of Europe's smelting capacity has already been curtailed due to record electricity costs in the wake of Russia's invasion of Ukraine. A ban would likely lead to increased trading volatility, after the metal was caught in recent weeks in a heavy sell-off as global recession fears mounted.

The potential ban has fueled worries about a possible short squeeze on aluminum, Wang Xianwei, an analyst with China Futures Co., wrote in a note. Still, the LME will aim to avoid repeat of a similar squeeze that occurred to nickel in March, he added.

Goldman Sachs Group Inc. downplayed the likelihood of such a ban and said the pressure on metals prices would continue, "given the current environment of physical demand weakness in Europe." The geopolitical situation doesn't incentivize delisting Russian metals from the exchange, analysts including Nicholas Snowdon said in a note Thursday.

Meanwhile, speaking to the demand outlook for industrial metals including copper, China's factory activity continued to struggle in September as the country's economic recovery was challenged by lockdowns in major cities and a property market downturn.

Aluminum added 0.8% to $2,215.50 a ton on the LME as of 11:13 a.m. local time. The metal is heading for a weekly gain of about 2.3%, following four weeks of losses. Zinc rallied 2% and copper added 0.7%.

Most Read from Bloomberg Businessweek

  • The Unstoppable Dollar Is Wreaking Havoc Everywhere But America

  • Jay Powell Needs Investors to Lose Money

  • Twitter Is in This Mess Because Jack Dorsey Was Too Busy Being a Bitcoin Influencer

  • Google's Low-Tech Plan to Solve the Opioid Crisis

  • As Home Prices Surge, Americans Are Moving to Cheaper Places

©2022 Bloomberg L.P.


More Related News

GameStop Reports Revenue Decline Amid Broader Gaming Slump
GameStop Reports Revenue Decline Amid Broader Gaming Slump

(Bloomberg) -- GameStop Corp. posted the biggest quarterly drop in revenue in two years, showing the struggling video game retailer's efforts to boost...

Peru Swears In Boluarte as New President After Castillo
Peru Swears In Boluarte as New President After Castillo's 'Coup' Attempt Fails

(Bloomberg) -- Peru's Vice President Dina Boluarte took over as head of state after President Pedro Castillo triggered a crisis by attempting to dissolve...

Biden Seeks Fossil Fuel-Free Federal Buildings in Hit to Gas
Biden Seeks Fossil Fuel-Free Federal Buildings in Hit to Gas

(Bloomberg) -- The Biden administration is poised to ban federal buildings from using fossil fuels, adding the government's heft to a growing electrification...

Bruising Stock Reversal Shows How Fed
Bruising Stock Reversal Shows How Fed's Pivot May Come Too Late

(Bloomberg) -- For many investors, December has been a shocker in the stock market. After getting sucked in by a rousing seven-week rally, they've now had to...

Apollo, Franklin Among Buyers of $750 Million Citrix Debt
Apollo, Franklin Among Buyers of $750 Million Citrix Debt

(Bloomberg) -- Apollo Global Management Inc. and Franklin Templeton are among investors that bought $750 million of debt backing the buyout of Citrix Systems...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


  • how to get a patent with InventHelp
    (2022-10-02 09:28:14Z)

    I am very enjoyed for this blog. Its an informative topic. It help me very much to solve some problems. Its opportunity are so fantastic and working style so speedy.


Top News: Business