International news within the industry of mining and metal, Aug, 15 2018
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The aluminium market is undergoing a supply shock

Shelekhov aluminium factory in Irkutsk Oblast, in Russia.  Photo: uc_rusal_photo_gallery
Shelekhov aluminium factory in Irkutsk Oblast, in Russia. Photo: uc_rusal_photo_gallery
Published by
Markku Björkman - 19 Apr 2018

The sanctions against Russian Rusal have sent shock waves to the aluminium market, where the metal price has risen to the highest since autumn 2011.

The aluminium contract increased by five percent on Monday, increasing by 20 percent to $ 2,382 per tonne since the sanctions became known one and a half weeks ago.

According to Bloomberg, the price increase continued to $ 2,429 per tonne on Tuesday morning, April 17, and from analyst levels, it is possible that prices can reach $ 3,000.

The fact that price movements are a rare event is emphasized by Reuters. On the metal exchange in London, the price was 12 percent last week - the biggest increase since the aluminium contract was launched in 1987, according to the news agency.

The strong reaction due to the sanctions against Rusal, one of the largest manufacturers in the aluminium market, ruled out the company from the western world's trading and financial system, causing concern for a supply shock.

The company produced seven percent of the world's aluminium last year. On the market outside of China, Rusal has a share of 17 percent.

The metal producer accounts for seven percent of world aluminium oxide production, a factor in aluminium production, with facilities in Ireland and Jamaica.

The aluminium market was already under pressure after Norwegian Hydro was forced to drive the world's largest aluminium refinery for half-machine in Brazil, where panic purchases are now reported.