Aluminum prices lurched to another record high on Monday after Western nations unveiled more sanctions on major producer Russia in response to its invasion of Ukraine, fueling worries about supplies.
Three-month aluminum on the London Metal Exchange hit a record $3,525 a tonne, paring gains to $3,416 by 1135 GMT, a rise of 1.7%.
Aluminum has hit successive record peaks this month and is on track to gain 13% in February, the biggest monthly rise since 2010.
More severe sanctions announced at the weekend included blocking some Russian banks from the SWIFT international payments system, which traders said may disrupt commodities exports from Russia.
"Based on current announcements, there's no clear sanction that will target metals flows, but increasing numbers of Russian companies are being impacted and that has put the market on tenterhooks," said Wenyu Yao, senior commodities strategist at ING Bank.
"There are also indirect impacts for zinc and aluminum due to high energy prices. Even though oil and gas are off the table for sanctions, if Putin uses gas to retaliate, there could be more explosive spikes in metals."
Aluminum is the most energy-intensive metal to produce.
Russia produces about 6% of the world's aluminum and accounts for about 7% of global nickel mine supplies. It is also a major producer of natural gas used to generate electricity.
LME nickel was up 1.3% at $24,670 a tonne, after having gained 3% earlier in the session.
"It seems that Russia is prioritizing its strategic interests over economic sanctions, so the situation runs further risks of escalation," said Yeap Jun Rong, market strategist at IG in Singapore.
* LME copper rose 0.5% to $9,919 a tonne, , zinc gained 0.8% to $3,652 and tin added 1.3% to $45,025. lead climbed 0.7% to $2,384.50
* Goldman Sachs expects a rise in the prices of commodities that Russia is a major producer of and lifted its short-term Brent crude forecast as the West stepped up political and economic sanctions on Moscow for its invasion of Ukraine.
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