Rusal shares plunge over 40 percent on U.S. sanctions

Rusal shares plunge over 40 percent on U.S. sanctions

The US imposed sanctions on Friday on the world's second-biggest aluminium producer, plus other companies, officials and oligarchs in response to what it described as "malign activity around the globe". Any assets the seven have under USA jurisdiction have been frozen and U.S. nationals are forbidden from doing business with them.

'The Russian government operates for the disproportionate benefit of oligarchs and government elites, ' said Treasury secretary Steven Mnuchin. Rusal shares sank on Friday in Moscow trading, then collapsed on Monday, losing about half their value.

The US' announcement last Friday has prompted bullish sentiment and expectations of tightness in the US aluminium market, but reactions from Asia on the impact on its domestic aluminium premiums have ranged from bullish to bearish so far.Asian consumers that use Rusal aluminium and export their end-products to the US, might use P1020 raw materials from other countries instead, some sources suggested.

Rusal, a Russian-based aluminum maker, has been included in a list of companies sanctioned by the US.

The fall in Rusal's share price represented a loss of more than 3.5 billion euros ($4.3 billion) for the company, which is headed by billionaire Oleg Deripaska.

The sanctions, the latest U.S. effort to punish Moscow for "malign activity around the globe", also affect 17 senior Russian government officials. Rusal sells more than 10% of its aluminium to the US. The latest sanctions affected companies such as Sberbank, whose shares fell 17% in Moscow.

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Evraz, the steel company controlled by the Chelsea football club owner Roman Abramovich, was the biggest faller in the FTSE 100, dropping nearly 15%.

EN+, another company owned by Deripaska, plunged 25 percent on the London bourse, the BBC reported.

Shares with Russian exposure listed elsewhere were also hit. It was mentioned that the US sanctions are highly likely to will have a negative impact on the business of the company and its development.

"This is an outrageous business from the point of view of illegality, from the point of view of flouting all the norms, and of course careful analysis is needed here", Putin's spokesman Dmitry Peskov told journalists.

EN+, which only listed in London in November having raised $1 billion from City investors despite fears over the potential of further sanctions being imposed on Russian Federation, said it would focus on maintaining its operations and ensuring it "abides by all applicable laws and regulations".

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