LONDON, Apr 23 (Reuters): Aluminium rose back towards last week's seven-year high on Monday, driven by concerns that U.S. sanctions on Russian producer UC Rusal could disrupt supply.
The metal has rallied 25 per cent so far this month and touched its highest since mid-2011 last week at $2,718 a tonne on fears the global aluminium market could face shortages as a result of the sanctions.
Rusal accounted for more than six per cent of global aluminium output last year.
"We are obviously in a period of elevated uncertainty currently when it comes to reorganising the supply chain, given that both Europe and the United States were significant buyers of Russian aluminium," Julius Baer analyst Carsten Menke said.
"Everybody is quite clear that these flows will dry up, and the question is where (new) supply will come from," he said. "The economy is doing fine, which means there will be a tendency towards demand growth. It is not just about replacing what was there, but also trying to meet this growth."
Nickel fell three per cent meanwhile, easing further from a three-year high of $16,690 a tonne seen on April 19, as fears of additional sanctions faded.
Three-month aluminium on the London MetalExchange was at $2,492.50 a tonne by 0930 GMT, up 1.0 per cent. Earlier it touched a session high of $2,534.50 a tonne. Aluminium stocks in London Metal Exchange-registered warehouses fell 10,525 tonnes to 1.385 million tonnes, exchange data showed on Monday.
On-warrant inventories - those not earmarked for delivery -dropped 4,100 tonnes to 935,650 tonnes, their lowest since February.
