Gold Silver Reports (GSR) – Metals Gripped by Turmoil as Rusal’s Sanctions Fallout Spreads — Consumers, manufacturers and traders are scrambling to secure supply cut off by Rusal, the largest aluminum producer outside China. Aluminum reached a six-year high and nickel jumped the most since 2009. Alumina, a raw material needed to make aluminum, notched a fresh record.
“It really is unprecedented in terms of the turmoil it’s unleashed,” Robin Bhar, a metals analyst at Societe Generale SA, said by phone from London. “It’s amazing to watch.”
Read More: Why U.S. Sanctions On Rusal Will Benefit Indian Aluminium Producers
The U.S. sanctions are threatening to upend the global supply chain for aluminum, which is used in planes made by Boeing Co. and Ford Motor Co.’s F-150 pickup truck. Rusal produces about 6 percent of the world’s aluminum and operates mines, smelters and refineries across the world from Guinea to Ireland, Russia to Jamaica.
Aluminum Report
The metal climbed as much as 5.2 percent to $2,530 a metric ton, the highest since August 2011. Goldman Sachs Group Inc. said prices could spike to $3,000 in the near term.
Rio Tinto Group flagged it may need to cut production in the wake of sanctions. The company is working with customers to minimize disruption and remains in the process of declaring force majeure on some contracts, it said Wednesday.
Alumina Report
Alumina is being particularly affected because Rusal is a key producer, with plants in places such as Ireland and Jamaica. Before the sanctions, supply was already constrained by output cuts at Norsk Hydro ASA’s Alunorte refinery in Brazil, the world’s biggest.
Read More: Commodity Traders Stop Buying From Rusal After Sanctions
A 30,000-ton cargo of alumina, the crushed ore feedstock which smelters use to produce aluminum, fetched $800 a ton, according to CRU Group analyst Anthony Everiss. The previous record for CRU’s index of alumina prices was $610 a ton in 2006. – Neal Bhai Reports
