High volatility of aluminum prices was contributed by the introduction of a ban on the supply of Russian aluminum to the UK and the US, as part of the next package of sanctions. The market witnessed an increase in uncertainty due to the changing situation on the global metals market. The increase in geopolitical tension in the Middle East also contributed to the growth of quotations.
From the macroeconomic point of view, the growth of inflation in the U.S. and strengthening of the labor market contributed to the prevalence of negative forecasts regarding the easing of monetary policy in the U.S., which supported the dollar and contributed to weakening demand for metals.
The imposition of sanctions on Russian aluminum supplies to Europe and the US will contribute to the change in the market structure. It is worth noting that in 2023, Rusal’s share of the global aluminum market was 5.6%. The main markets were Asia (38.4%), CIS countries (31.9%) and Europe (27.8%), while the share of aluminum supplies to the US was only 1.4%. At the time the sanctions were imposed, 90% of aluminum stocks in LME warehouses were aluminum from Russia.