LONDON, Dec 20 (Reuters) – Aluminium prices hit their lowest in 16 months on Thursday after the United States said it will lift sanctions on Russian aluminium giant Rusal, freeing up supply from one of the world’s top producers. Three-month aluminium on the London Metal Exchange slipped to $1,905.50 a tonne, the lowest since Aug. 4, 2017, and traded at $1,923 a tonne in official midday rings, down 0.2 percent. In April, Washington imposed sanctions on Oleg Deripaska and companies in which he owns stakes, including Rusal and its parent En+, citing “malign activities” by Russia and prompting turmoil in global aluminium markets. After lobbying by European governments, Washington postponed enforcement of the sanctions and started talks with Deripaska’s team on lifting the measures if he ceded control of Rusal. Deripaska will remain under sanctions, the Treasury said. However, the three Deripaska companies – Rusal, En+ and power firm EuroSibEnergo – have agreed to reduce the oligarch’s stakes. Aluminium hit a near seven-year high when sanctions on Rusal, the world’s second largest aluminium producer, were announced, before coming off some 30 percent from the April peaks. Commodities strategist Oliver Nugent at Citi said the news was modestly bearish for aluminium prices. “We think there’s about 300,000 tonnes of unsold Russian metal, mostly in Europe… (but) we suspect (traders will) gradually feed the metal out. Its not in their interest to crash prices.” He added, however, that U.S. aluminium premiums or surcharges were most exposed to significant price falls as imports of Russian aluminium could recover strongly after falling around 50 percent this year on the Rusal restrictions. * RUSAL: Rusal’s Hong Kong shares rose as much as 26.8 percent to their highest since April after the U.S. Treasury said it will lift sanctions on Rusal.
* LME RESPONSE: The LME said it proposed to reverse its suspension on aluminium produced by Rusal if U.S. sanctions are lifted.
* CHINA ALUMINIUM: China’s biggest aluminium producers will hold a meeting on Friday to discuss slumping demand and falling prices, sources said.
* JAPAN ALUMINIUM: The premiums that Japanese buyers pay for aluminium are set to rise to $100-130 a tonne later next year due to tighter global supplies despite an expected return of Rusal supplies, trading house Marubeni said.
* ALUMINIUM SUPPLY: Global primary aluminium output fell to 5.312 million tonnes in November from a revised 5.49 million tonnes in October.
* GLOBAL MARKETS: World equity markets slumped after the U.S. Federal Reserve dashed investor hopes of a more dovish policy outlook even as signs grow that global economic growth is stuttering.
* OTHER METALS: Copper was last bid up 0.3 percent in rings at $6,030, zinc traded down 0.1 percent at $2,538, lead was last bid down 0.2 percent at $1,962, tin traded up 0.2 percent at $19,300 while nickel was last bid down 0.3 percent at $10,985.
