Will Rusal default on some liabilities due to new sanctions?

The stock of Rusal simultaneously tumbled a whopping 50 percent Monday alone amid fears that USA sanctions which have been created to make it impossible for Deripaska's commodity giant to do business in U.S. dollars would terminally cripple the company, forcing an imminent bankruptcy and collapse for the company owned by one of President Vladimir Putin's closest allies. Benchmark aluminium on the London Metal Exchange ended up 4.7 percent at $2,139 a tonne from an earlier $2,144, its highest since March 7 and its largest one day gain since November 2011.

"This does warrant a little bit of panic buying by traders - the risk is large enough and real enough to buy on the back of insecurity of supply", said Mr Daniel Hynes, a senior commodities strategist at Australia and New Zealand Banking Group.

In a statement, Rusal said the sanctions "may result in technical defaults in relation to certain credit obligations of the group".

Russian aluminum giant Rusal saw its share price almost halved on the Hong Kong stock exchange Monday after Washington placed it under sanctions, putting the metals major at risk of defaulting on part of its debt.

'The Russian government operates for the disproportionate benefit of oligarchs and government elites, ' said Treasury secretary Steven Mnuchin.

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Billions of pounds were wiped off the value of Russian companies yesterday as the business empire of one of its most prominent oligarchs teetered on the brink in the face of USA sanctions. Deripaska called the reasons "groundless, ridiculous and absurd".

"We have a whole list of possible measures that are being studied". Glencore is one of Rusal's biggest investors and buyers of its aluminium, and its chief executive, Ivan Glasenberg, sits on the Rusal board. The price of aluminium jumped as traders anxious Rusal would be excluded from supplying the market.

"The question is whether other countries will respect the sanctions", Paul Adkins, managing director of AZ China Ltd, said from Dusseldorf where he's attending a conference.

In Moscow the dollar-denominated RTS index ended 11.2% lower and the rouble-based MOEX Russian index shed 7.7%, while the rouble fell 3% against the United States dollar.

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