Aluminum prices witnessed a 1.19% fall last week. A news that the United States will impose a 200% tariff on aluminum and derivatives produced in Russia from March 10. The White House said on Friday, effectively a ban as it announced sanctions on the anniversary of Russia’s invasion of Ukraine, Weighted on sentiment.
The United States will also apply a 200% tariff on aluminum imports of primary aluminum produced in Russia from April 10.
“President Biden has made it a priority to mitigate the effects of Russia’s invasion on domestic industries critical to our national security. And this includes the American aluminum industry,” the U.S. Department of Commerce said.
“In imposing these tariffs, we are denying Russia an important market for its aluminum while taking a stand for America’s workers.”
Russian aluminum produced by Rusal, which accounts for about 6% of global supplies.
Neither Russian metal nor the companies that produce have been targeted by sanctions imposed on some Russian companies in response to Russia sending troops into Ukraine last year.
In 2018, however, U.S. Treasury Department sanctions on Rusal froze the bulk of the company’s exports, paralyzed its supply chain and scared off customers.
The sanctions also fueled a jump in aluminum prices on the London Metal Exchange.
The tariffs are unlikely to significantly tighten the aluminium market in the United States as the country imports only a small percentage of its aluminium from Russia.
Rusal declined to comment when contacted by Reuters.
Technical View
Aluminum Prices turned down from the peak of 227.45 and since then dropped more than 6%. Last week prices slipped from the high 214.55 and made a low 206 before weekly closing of 207.95
A rising channel pattern noted on the weekly chart, which indicates bearish momentum in near future.
Adding to this, Aluminum prices are trading below its 100 SMA which also indicates bearish momentum in the near future.
However, Aluminum prices need to break crucial support 205.50 in order to test 202.50-198.50.
Else, any temporary pullback towards 211.50-212 could attract near future selling activities. With stop loss above 217.50, target would be 205.50-200.00
On upside, massive resistance is seen at 217.50. A break above only appears to test next resistance 220-224.50.