Aluminum prices on the London Metal Exchange lost another 7 percent on Tuesday, following the sharp decline yesterday, after the United States gave American customers of Russian producer United Company Rusal more time to comply with sanctions.
The price of aluminium was last trading down 7.1 percent at $2,295 a tonne.
The metal had seen a sell-off on Monday, falling nearly 10 percent during the day from an early session high of more than $2,500. Trading closed 7 percent down.
On Monday, the US Department of the Treasury signaled that the sanctions against Rusal could be lifted, if billionaire Oleg Deripaska sold his stake in the company.
In the meanwhile, the US Treasury extended the period during which companies may continue to trade with Rusal, setting the new deadline at October 23 from the previous June 5.
“The chaos of the last two weeks on the aluminium market appears to have ended,” Germany’s Commerzbank said in a note.
“If the sanctions against Rusal are lifted or at least relaxed, the concerns about tight supply on the world market would no longer be justified. In this case, the aluminium price would have to fall further,” it added.
Meanwhile, shares of Hong Kong-listed Rusal soared 43 percent on Tuesday.
Sanctions against Rusal were announced on April 6, leading to aluminium prices climbing to the highest levels since 2011.
Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com
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