Aluminium Prices Rise Following New Sanctions On Russian Metals

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  • Commodities News
Aluminium Prices Rise Following New Sanctions On Russian Metals
Credit: © Reuters.

Aluminium prices surged by 1.23% to settle at 234.85 as the US and UK implemented new sanctions on Russian metals, aiming to curb Russia's revenue from metal exports supporting its military operations in Ukraine. The ban on Russian metal supplies, including aluminium, copper , and nickel, adds pressure to global commodity markets, although analysts warn it may not fully deter Russian sales and could flood the market with old stocks, introducing more uncertainty.

Meanwhile, China's aluminium output in March saw a notable increase of 4.19% year-on-year, reaching 3.555 million metric tons. The resumption of production post-Chinese New Year holidays contributed to this uptick, with aluminium smelters returning to normal operations. Additionally, the share of aluminium liquid output rose, signalling a healthy production trend. Anticipation of further production increases in April, coupled with Goldman Sachs (NYSE: GS )' upward revision of China's economic growth forecast to 5.0%, adds bullish momentum to the aluminium demand outlook.

From a technical perspective, the market witnessed short covering, evidenced by a drop in open interest by -5.02% to settle at 2724, alongside a price increase of 2.85 rupees. Currently, Aluminium finds support at 233, with a potential downside test at 231.1. On the upside, resistance is anticipated at 236.7, with a breakthrough potentially leading to further testing at 238.5. Traders should monitor geopolitical developments, especially regarding the impact of sanctions on Russian metal exports, as well as domestic production trends in China, to gauge future price movements in the aluminium market.

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