Aluminium touches 6 year high on force majeure threats
Rio Tinto said it would declare force majeure on contracts following US sanctions imposed on Rusal
The Aughinish Alumina refinery in Limerick.
Aluminium prices touched a new six-year high on Monday as the dollar fell and after Rio Tinto said on Friday it would declare force majeure on some of its customer contracts following US sanctions on its partner Rusal.
Benchmark aluminium on the London Metal Exchange rose 2.7 per cent to $2,347 per tonne in official rings.
Prices earlier touched their highest since March 2012 at $2,366.50.
“Aluminium keeps gaining since we are likely to get force majeures declared by other traders since Russia’s Rusal was one of the world’s largest producers,” said Commerzbank head of commodities research Eugen Weinberg.
Rio Tinto also said it was reviewing Rusal’s 20 per cent stake in the Queensland Alumina refinery, Rusal’s supply and offtake arrangements, bauxite sales to Rusal’s refinery in Ireland and offtake contracts for alumina.
Rio supplies Aughinish Alumina with bauxite, which is then turned into alumina. While sources said that Aughinish Alumina, Europe’s largest alumina refinery, which was acquired by Rusal in 2007, has enough bauxite to last until the end of June, Rio’s decision has added to concerns over the future of the operation on the Shannon estuary.
Taoiseach Leo Varadkar on Friday held a private meeting with management of the Russian-owned alumina producing plant in Askeaton, Co Limerick, as “concern” mounted over the plant’s continued operations, and the future of its 450 employees. – Additional reporting, Reuters