US Treasury Secretary Steven Mnuchin said Monday that Washington was considering an appeal by metals giant Rusal for sanctions relief, adding that the United States would also extend the deadline for companies to wind down dealings with the struggling Russian aluminum producer by five months.

"Rusal has felt the impact of US sanctions because of its entanglement with Oleg Deripaska, but the government is not targeting the hardworking people who depend on Rusal and its subsidiaries," Mnuchin said.

On April 6, the Trump administration imposed sanctions against several Russian entities and individuals, including Rusal and its major shareholder Oleg Deripaska, to punish Moscow for its suspected meddling in the 2016 US election and other alleged "malign activity."

Rusal — the world's second-biggest aluminum producer — has been particularly hard hit as the sanctions have caused concern among some customers, suppliers and creditors that they could be blacklisted too through association with the company.

Read more:Russia: 'Market slump won't last long'

Prices of aluminum have soared by more than 30 percent since the US sanctions announcement. But on Monday, prices for the metal on the London Metal Exchange, rapidly reversed course to trade down more than 7 percent after soaring 3 percent in morning trading — a 10 percent swing within just one day.

Oleg Deripaska to sell?

The US Treasury Secretary met with Russian Finance Minister Anton Siluanov during International Monetary Fund (IMF) meetings in Washington last week. The Russians were seeking "clarification" on Rusal and Oleg Deripaska, Mnuchin told reporters on Saturday.

Now Mnuchin said Treasury could "provide sanctions relief" if Deripaska sold the company. However, the Russian oligarch is trying to save Rusal without surrendering control. He owns 48 percent of Rusal and controls it through a shareholder agreement with others including British mining firm Glencore and another Russian oligarch, Viktor Vekselberg, who is also under sanctions.

Rusal declined to comment on requests from international media, while Deripaska's spokeswoman wasn't immediately available.

Metals turmoil

Washington's clarification follows two weeks of chaos in global metal markets, during which manufacturers scrambled to secure supply. A German industry lobbying group has warned, for example, that aluminum smelters may be forced to close, which would threaten automakers, aerospace and other industries as well as affecting non-Rusal aluminum producers.

Rusal produces about 6 percent of the world's aluminum and operates mines, smelters and refineries across the world from Guinea to Ireland and Russia to Jamaica.

Given the impact on "partners and allies," Mnuchin also said that both "US citizens and non-US citizens are now authorized to engage in specified transactions related to winding down or maintaining business" with Rusal and its subsidiaries until October 23.

Daniel Briesemann, an analyst at German lender Commerzbank, said the Treasury's announcement should calm things down. "It looks as if there was a lot of pressure from the US aluminum downstream industry," he told the news agency Bloomberg.

And Brian O'Toole, a senior fellow at the Atlantic Council, said that Rusal's effort to get off the sanctions list may turn out to be successful. "Mnuchin's statement signals that this is more than just getting an extra few months to stop business with Rusal," he said.

Read more: Russia's new sanctions could limit patient access to US medicine

The drop in aluminum prices on Monday also prompted a selloff in other commodity markets as optimism seems to be spreading that the US isn't likely to impose further sanctions on Russia's metals and energy companies.

uhe/jd (Reuters, dpa)