Aluminum price rose after the US announced major sanctions against Russia

The price of aluminum on the global market soared on expectations that a new round of US sanctions against Russia might target the metal, which could affect supplies.

US President Joe Biden announced on Friday that the US would release a “major” sanctions package against Russia, but he did not specify which industries would be affected, Bloomberg reported.

His comments fueled speculation that Russia’s massive metals sectors, which have avoided extensive US sanctions until now, could face restrictions, although the United Kingdom has implemented sanctions.

Traders have been keeping an eye out for limits on Russian metals since the UK banned British individuals and entities from trading physical metals such as aluminum, copper, and nickel with the Russian Federation in December.

Futures jumped more than 2% in early trade Wednesday, following a brief rise in response to Biden’s comments on Tuesday. Prices are rising on Biden’s announcement as investors examine possible limits and their impact.

Biden stated that the measures were a response to Russian opposition leader Alexey Navalny’s death in a Russian prison. US National Security Advisor Jake Sullivan stated that the sanctions would target certain elements of Russia’s “defense-industrial base” as well as other sources of income for the Kremlin.

After Moscow’s full-scale invasion of Ukraine in February 2022, US-led sanctions subjected large sections of Russia’s economy as well as many key officials, leading aluminum to soar to a new high above $4,000 per ton.

For months, the West has considered slapping a ban on Russian aluminum imports. According to analysts at European Aluminium, the previous 12 sanctions packages had no impact on around 85% of Russian metal exports to the EU.

There were also calls for the EU leadership to include an embargo on Russian aluminum in the new sanctions package. On the eve of the second anniversary of Russia’s full-scale invasion of Ukraine, the European Union is considering new sanctions against Moscow.

This 13th package of EU sanctions against Russia for its war aggression will add more companies and individuals to the blacklist. However, a ban on Russian metals and nuclear fuel is unlikely, according to media reports.

In December, the United Kingdom decided to prohibit British persons and businesses from selling actual metals from Russia, including aluminum, copper, and nickel. At the time, the UK hinted at the prospect of collaborating with overseas partners. The London Metal Exchange plays a crucial role in global metals markets, making British policy important.