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LME Aluminium Gains as Russia-Ukraine Conflict Raises Supply Threat

March 1 (Reuters) - London aluminium prices firmed on Tuesday, hovering below a record high touched in the previous session, as mounting sanctions on Russia for invading Ukraine exacerbated concerns over the metal's supply.

Three-month aluminium on the London Metal Exchange rose 0.8% to $3,396 a tonne by 0740 GMT, after touching a record high of $3,525 on Monday. The contract also posted its biggest monthly jump of 11.5% since 2018 in February.

The most-traded April aluminium contract on the Shanghai Futures Exchange ended daytime trading up 0.4% at 22,730 yuan ($3,601.19) a tonne.

"The (Russia-Ukraine) conflict continues to fuel a surge in commodity prices, as intensifying Western sanctions threaten to disrupt trade," TD Securities said in a note, adding, the halt in shipments from the alumina plant in Ukraine is threatening to disrupt Russian aluminium output.

Russian aluminium producer Rusal, halted production at Nikolaev alumina refinery in Ukraine, citing logistical challenges on the Black Sea and surrounding area.

The United States and its allies have imposed sanctions on Russia's top businesses, oligarchs and officials, including President Vladimir Putin himself. Ceasefire talks held Monday failed to reach a breakthrough and negotiators have not said when a new round would take place.

"A near-term sharp rally in base metals seems distant as investors may still consider safe havens better than stocks or commodities," said Kunal Sawhney, chief executive officer at research firm Kalkine.


* LME copper rose 0.6% to $9,941 a tonne, nickel gained 1.2% to $24,565, zinc was up 0.8% at $3,693.5 and tin was 0.9% higher at $45,650. Lead rose 0.6% to $2,401 tonnes, having earlier hit a peak since November 2021.

* ShFE copper rose 0.3% to 71,050 yuan a tonne, nickel was flat at 176,000 yuan, zinc rose 1.1% to 25,185 yuan, lead edged 0.3% higher to 15,585 yuan and tin gained 1.7% to 341,460 yuan.

* Copper output in Chile, the world's largest producer of the metal, fell 7.5% year-on-year to 429,923 tonnes in January, the country's statistics agency said on Monday.

* Factory activity in China, the top metals consumer, unexpectedly expanded in February as new orders improved, pointing to some resilience in the economy even as downward pressure builds and Russia's invasion of Ukraine heightens global uncertainty. 

($1 = 6.3118 Chinese yuan renminbi)

Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V and Rashmi Aich

Source: Reuters

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