Aluminum rose to near the strongest level since 2008 as traders assessed the possible impact of a potential easing of geopolitical tensions over Ukraine and the persistent pressure of soaring energy costs on global supplies. 

Russian President Vladimir Putin said he hopes for a diplomatic solution to tensions with the U.S. and its allies, and announced a partial pullback of thousands of troops near the Ukrainian border. The news helped lift markets broadly, and helped to ease concerns over possible disruptions to metal supplies from Russia. NATO assertions that the pullback of Russian troops isn’t taking place are inaccurate, Kremlin spokesman Dmitry Peskov said on a conference call Wednesday.

Aluminum has led gains in base metals this year with an advance of 14%, as rising fuel costs and environmental curbs snarl supply in Europe and China. Stockpiles held by the London Metal Exchange shrank again on Wednesday, alongside most other metals. Copper inventories rose 7.6% from the lowest since 2005, signaling some relief for its incredibly tight market. 

In China, the biggest producer and consumer of aluminum, prices are supported by tight supply because of pandemic-driven lockdowns and constraints during the Beijing Winter Olympics, Jinrui Futures Co. wrote in a note.

Separately, China’s inflation slowed in January, giving the central bank more room to ease before a key political leadership meeting later this year. The outlook for a further relaxation of monetary policy is supportive for metals.

Aluminum rose 0.9% to $3,236 a ton on the LME at 1:40 p.m. local time. The metal reached $3,333 in intraday trading last week, the highest price since a record of $3,380.15 was touched in 2008. Other metals gained, while copper edged lower.