PHOTO
Aluminium prices soared to 22-month highs on Monday and nickel to seven-month peaks after the U.S. and Britain banned the London Metal Exchange and CME from accepting new Russian production of the two metals
Benchmark aluminium on the LME rose 2.1% to $2,546 a metric ton in official rings from an earlier high of $2,728 and nickel was up 1.6% at $18,075, below a session peak of $19,355.
Volatile trading is likely as the market digests and works out the potential implications of the new restrictions.
The LME on Saturday banned from its system Russian aluminium, nickel and copper produced on or after April 13 to comply with new restrictions imposed over Russia's war in Ukraine.
"The metal most exposed to this policy is aluminium. I don't think anyone is really struggling on the copper and nickel front," said Liberum analyst Tom Price.
"Large amounts of aluminium in LME warehouses are Russian and the LME contract relies heavily on Russian flow ... Aluminium prices have been going up recently."
LME aluminium prices have jumped nearly 9% in April, partly because of supply concerns.
The share of available aluminium stocks of Russian origin in LME-approved warehouses stood at 91% of total aluminium stocks in March. Russian copper stocks amounted to 62% of total copper stocks and the number for nickel was 36%.
Traders and analysts expect more Russian aluminium and nickel produced by Rusal and Nornickel to head towards China and other countries including Turkey.
Growing nickel supplies from top producer Indonesia are expected to cap any nickel price gains while many copper consumers have already found alternatives to Russian supply.
On the spread front, concern over availability on the LME has narrowed the discount for cash metal over the three-month aluminium contract to a two-month low of $20 a ton, compared with Friday's high above $50 .
In other metals, copper gained 0.5% to $9,505 a ton, zinc fell 1.6% to $2,783, lead slipped 0.3% to $2,169 and tin was up 1.1% at $32,700.
(Reporting by Pratima Desai Editing by David Goodman)