
© Sputnik/Evgeny Biyatov
The global metals market has been weighing potential supply disruptions following news that US government is considering a ban on Russian aluminum. Prices have been in a disarray amid growing uncertainty.
According to experts, unsold metal tends to end up in the London Metal Exchange (LME) warehousing system, which are warehouses authorized by the exchange to store LME-registered metal.
"It's been very disappointing for the poor aluminum market to see kind of a double whammy from weakening global demand, in China in particular, but also Russia dumping aluminum on the global market," Wolfe Research mining and metal analyst Timna Tanners told CNBC on Thursday. "So definitely this quarter reflected those challenges."
The next quarter could also be affected unless there is some action to stop the potential dumping of Russian-origin metal and a lift in Chinese demand, both in infrastructure development and property construction, Tanners warned.
Last week, media reported that
the White House was mulling an effective ban on Russian imports of the metal used in transport and construction. The reports indicated that Washington was eyeing three options, which could include an outright ban, increasing tariffs to levels so punitive they would impose an effective ban, or sanctioning Russian company Rusal, which produces the metal.
Industry experts have warned that such a move could destabilize metal markets around the globe. The embargo on aluminum, which is crucial to most heavy industries, could potentially force consumers in the US and other countries into a rush to find replacement metal.
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