KUALA LUMPUR: Press Metal Aluminium Holdings Bhd shed 6.5% in early trade as aluminium drops most in seven years after US signals Rusal sanctions relief.
The US Treasury on Monday said that it could lift sanctions on Russian aluminium giant Rusal if tycoon Oleg Deripaska gives up control of the company.
The announcement sent aluminium prices falling by 7.2% on the London Metals exchange, while other metals including gold, nickel and palladium also fell sharply.
Press Metal led the list of top losers, shedding 6.47%, or 33 sen to RM4.77 with 4.1 million shares traded. PMetal-WC fell 6.65%, or 32 sen to RM4.49. All other Press Metal securities were also traded lower today.
Earlier, AmInvestment Research has cut its earnings forecasts for Press Metal on negative events impacting its supply of alumina, a raw material in the production of aluminium.
In a recent report, it maintained its “hold” call on the counter and trimmed its fair value by 7% to RM3 from RM3.23 previously, based on 13x revised FD FY19 forecast earnings per share.
The research house said Rio Tinto, one of the largest producers of alumina, has invoked force majeure for certain contracts.
In addition, Brazil-based Norsk Hydro Alunorte has halved its alumina production after being accused of contaminating water supply surrounding its site in Brazil.
This comes following US government sanctions on 17 Russian entities including Rusal PLC, causing aluminium prices to soar by 25% over the last two weeks.
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