BY: ONOME AMUGE
Aluminium rose at the closing session of the week’s trade, but stumbled 10 percent for the week over heightened market volatility, after uncertainty about exports from top producer, Russia, had previously pushed prices to record highs.
Benchmark aluminium on the London Metal Exchange (LME) gained 1.4 percent to $3,474 a tonne.
On the flipside, the metal, used in transport, construction and packaging, plunged from around $4,073.50 recorded at the start of the week to its present level below $3,500 a tonne.
However, the light metal is still up nearly 25 percent after gaining 42 percent in 2021, when dealers began witnessing a market deficit. The deficit has resulted in LME-registered warehouses aluminium stocks dropping to 755,950 tonnes from almost two million tonnes a year earlier.
In the short term, ANZ analysts stated that the surge in energy and coal prices could constrain output of energy-intensive aluminium smelters in Europe and Asia, worsening supply shortages and placing aluminium on a bullish platform.
They added that a lot more supply will probably get hurt if the Russia-Ukraine conflict escalates.
Meanwhile, the extreme stress faced in the base commodity markets saw a 300 percent rally in nickel as the silvery-white metal soared above $100,000 a tonne during the week. This resulted in the London Metal Exchange (LME) suspending trade of the metal on the Exchange.
Defending its decision to suspend nickel trading, the London Metal Exchange stated that the market had become disorderly, with prices not reflecting the physical market.
Other base metals were inflicted with weekly losses as zinc fell 0.7 percent at $3,835 a tonne, tin lost 0.3 percent at $43,600 a tonne, lead gained 0.9 percent, but recorded a four percent weekly loss, while copper rose 1.2 percent but tumbled to a four percent loss at the end of the week.