Aluminium market participants in the United States and Europe expect further downward pressure on premiums and London Metal Exchange prices following the US Treasury Department's announcement that sanctions against UC Rusal will be removed.
Sanctions were imposed against Rusal in April, followed by several extensions of general licenses that allowed companies additional time to wind down their contracts with the Russian aluminium supplier. The US Treasury's Office of Foreign Assets Control announced on Wednesday December 19 that sanctions will be removed in 30 days - pending US Congressional approval - due to significant restructuring and corporate governance changes.Rusal's press office did not immediately respond to a request for comment.Most sources told Fastmarkets that they anticipate downward pressure on an already depressed LME aluminium price and some softening in the US Midwest aluminium premium.At least partially due to the sanctions, the P1020 duty-paid Midwest premium climbed in April to a multiyear high of 22-23 cents per lb - more than double the 9.4-9.5 cents per lb at which it began the year. The premium was most recently assessed at 18.75-19.25 cents per lb on December 18. The LME...