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Concerns about long-term supply disruptions stemming from the United States’ sanctions against Russian aluminium producer UC Rusal heightened after Oleg Deripaska, Rusal’s major shareholder, said he had no plans to surrender control of the firm.
The US had said on Monday that it would consider lifting the sanctions if Deripaska, who is also co-owner of Russian nickel producer Nornickel, ceded control of Rusal.
The renewed supply concerns pushed aluminium and nickel prices on the London Metal Exchange upward overnight, with this strength filtering through to Asia this morning.
The July nickel contract price on the SHFE traded at 104,160 yuan ($16,453) per tonne as of 09.55 am Shanghai time, up by 0.8% or 810 yuan per tonne from Thursday’s close.
Meanwhile, the SHFE June aluminium contract price rose by 0.5% or 75 yuan per tonne to 14,440 yuan per tonne.
“Afternoon news that Oleg Deripaska has no plans to restructure Rusal, sent aluminium prices quickly higher… adding to underlying market volatility and tightening of the spreads,” Liz Grant, senior account executive at Sucden Financial Research, said late on Thursday.
But a stronger dollar kept a cap on gains in the two metals.
The dollar index was recently at 91.53 as of 11.25 am Shanghai time, up from 91.15 at roughly the same time on Thursday. The recent low being 89.23 on April 17.
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