Lifting of sanctions makes Rusal shares hit the highest at HKEX; LME aluminium falls

U.S. President Donald Trump's administration’s decision to lift sanctions on Oleg Deripaska’s  aluminium conglomerate Rusal and its parent company En+ Group despite strong opposition raised Rusal’s shares in the exchange and pushed back the LME aluminium prices.

The move sent the Russian stock index to an all-time and the Hong-Kong listed shares in Rusal, the world's largest aluminium producer outside China, hit their highest since April on Monday, January 28 after rising 9 per cent.

Aluminum prices on the London Metal Exchange (LME) dropped as much as 1.4 per cent after the opening yesterday. LME aluminium fell and closed at US$ 1860 per tonne yesterday from US$ 1877.5 per tonne last week. When sanctions were announced in April 2018, benchmark aluminium price on London Metal Exchange shot up to the highest in almost 7 years and closed at US$2602.5 per tonne on April 19.  

LME announced that had lifted its ban on storing Rusal aluminium in LME-approved warehouses with immediate effect.

"Members may freely enter into contracts with Rusal and its affiliates," the LME said in a statement.

After the Treasury announcement, Rusal said its chairman, Jean-Pierre Thomas, had resigned as part of the deal to lift the U.S. sanctions. En+ Group also announced the resignation of several of its board members.  En+ Group appointed new directors to adhere U.S. Treasury demands that the boards of both Rusal and En+ Group be made up of independent directors. A separate board committee will be established for compliance and the retention of an independent expert counsel to advise the board. En+ also announced that Swiss company Glencore would swap shares in Rusal for a direct ownership interest in En+.