Traders sold metals' futures with a vengeance after the USA softened its stance on sanctions against United Co.
Rusal fell into the list of USA sanctions because of its involvement with Oleg Deripaska, but the U.S. government does not want to affect the working people who depend on Russal or its subsidiaries. That's good to know for both strategic and tactical purposes.
Prices for alumina and aluminum have surged since the US enacted sanctions that Congress ordered for Russia's interference in the 2016 election. Aluminium on the London Metal Exchange dropped 1.8pc to $2,254.50 (€1,844.19) a metric ton after tumbling 7.1pc yesterday, the most in nearly eight years. The Russians were seeking "clarification" on Rusal and Oleg Deripaska, Mnuchin told reporters on Saturday.
THE United States has indicated it may provide sanctions relief on Rusal - the company that owns Aughinish Alumina in Limerick. However, the Russian oligarch is trying to save Rusal without surrendering control.
The value of Rusal's stock by this week had fallen by half, with investors fleeing on fears that the company will be unable to stay in business as customers around the world sever ties because of the sanctions and as the company's financing dries up in USA -dominated financial markets.
Representatives for Rusal and Deripaska did not immediately respond to requests for comment. A German industry lobbying group has warned, for example, that aluminum smelters may be forced to close, which would threaten automakers, aerospace and other industries as well as affecting non-Rusal aluminum producers. "Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider Rusal's petition", he said.
"Risks to aluminum prices remain, since the deadline for Rusal sanctions has simply been pushed back until October and we expect the volatility to persist", said Christian Georges, an analyst at Societe Generale. "Mnuchin's statement signals that this is more than just getting an extra few months to stop business with Rusal", he said. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.