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Steven Mnuchin, the USA treasury secretary, said the "impact on our partners and allies" was a factor in the decision, and made clear that the sanctions were aimed at Mr Deripaska, a Russian national considered close to President Vladimir Putin.

Aluminium prices continued to fall on Tuesday after Washington gave USA customers of Russian producer United Company Rusal more time to close out their business with the company and comply with sanctions.

"The US government is not targeting the hardworking people who depend on Rusal and its subsidiaries", explained Treasury Secretary Steve Mnuchin.

Further, the U.S. government may consider lifting of the ban if Rusal's major shareholder Oleg Deripaska ceded control of the company. The US authorities stated that by October 23, 2018 all contacts with Russian companies in the latest list of sanctions had to be discontinued.

Rusal's aluminum customers also now have more time to seek other suppliers.

On Tuesday, Aluminum on the London Metal Exchange closed down 3 percent at US$2,227 per tonne, after touching its lowest point since early April at US$2,200.

It also said it would not impose secondary sanctions on non-U.S. entities engaged with Rusal or its subsidiaries.

The US Treasury said it was extending the time limit for winding up business with Rusal and hinted at easing restrictions on the company that have upended metals from Russian Federation, to Australia, China and Europe. However, the Russian oligarch is trying to save Rusal without surrendering control. The price of Rusal had fallen by nearly 70 percent after the announcement. The Kremlin and Deripaska did not immediately respond to the announcement.

After three weeks of intense volatility, metal markets seem to be calming down. It is expected to impact Rusal's smelter in Sweden, besides causing a disruption in the alumina supply chain. Processing transactions in any other currency is also proving hard, as banks and suppliers around the world distance themselves from Rusal, in fear of becoming a target for secondary sanctions.

"Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider RUSAL's petition", Mnuchin said in the statement.

Wood Mackenzie analysts said Treasury's announcement provides "much-needed breathing space" for the aluminum market. "It looks as if there was a lot of pressure from the U.S. aluminum downstream industry", he told the news agency Bloomberg. According to an explanatory note attached to the new U.S. restrictions list, American authorities ordered USA investors to get rid of shares of sanctioned Russian companies by May 7, 2018. Additionally, a rally in other commodities as well boosted such stocks.