Foreign media reported on February 23, it is reported that after the US sanctions package did not impose any major restrictions on Russian industrial metals, aluminum prices fell and nickel prices reversed earlier gains.
The sanctions announced on Friday include targeting more than 500 individuals and entities linked to the Russian war machine, but the country's base metals industry remains unscathed. Both metals received a boost this week on expectations that the package could weigh on supply.
Nickel prices, which had risen steadily this week in anticipation of the sanctions news, gave up earlier gains of as much as 1.2 per cent to trade just 0.3 per cent higher. Aluminium fell as much as 1.1 per cent on Friday.
On Wednesday, aluminum market prices hit their highest level since early February after US President Joe Biden announced earlier that new sanctions would be imposed in response to the death of Russian opposition leader Alexey Navalny. The latest wave of US measures comes on the eve of the second anniversary of Moscow's invasion of Ukraine.
In the absence of new measures, the focus has returned to fundamentals.
Ewa Manthey, commodity strategist at ING Groep NV, said: "After getting a boost from sanctions speculation this week, aluminium has given up all its gains this afternoon."
"Now, the focus is back on demand-side issues, including China's challenging macro backdrop, higher borrowing costs, and the uncertain path of the Fed's easing cycle." We believe global economic uncertainty will continue to weigh on the outlook for aluminium."
Nickel is still on track for a weekly gain of more than 6 per cent, its biggest weekly gain since July. Ole Hansen, A/S commodity strategist at Saxo Bank, said nickel's rally may have been driven by short covering by hedge funds that misfired earlier.
However, Mr. Manse said earlier that the market remains oversupplied.
Russia's metals and mining industry was not freed from blanket restrictions until December, when Britain, where the London Metal Exchange is based, announced its own restrictions. But some consumers and traders have been reluctant to buy Russian metals for some time, and the British move has only added to the complexity of handling materials from the country.
Nickel on the London Metal Exchange is trading at $17,450 a tonne. London time. Aluminium fell 0.9 per cent to $2,178.50 a tonne, while copper fell 0.4 per cent.
