The US Treasury on Monday said that it could lift sanctions on Russian aluminum giant Rusal if tycoon Oleg Deripaska gives up control of the company.
The announcement sent aluminum prices falling by 7.2 percent on the London Metals exchange, while other metals including gold, nickel and palladium also fell sharply.
The Treasury said in a statement that it would give companies more time to comply with the sanctions Washington announced April 6 against Russian officials in response to the attempted murder by poisoning of former spy Sergei Skripal, which Britain and the United States have pinned on the Kremlin.
It also said that sanctions relief could come "through divestment and relinquishment of control of RUSAL by Oleg Deripaska."
The sanctions threatened the business of Rusal, which accounts for some seven percent of the world's aluminum production.
Its shares plunged by two-thirds on the Hong Kong Stock Exchange. Trading on the HKSE was closed when the US announcement was made.
The sanctions, by threatening actions against companies with US units doing business with the Rusal, also spurred worries of tighter aluminum supplies on the global market, sending prices of the metal soaring.
Oligarch Deripaska is seen as close to Russian President Vladimir Putin, and also had dealings with Paul Manafort, the former chairman of President Donald Trump's election campaign who is under federal indictment in part over those dealings.