SHANGHAI – Russian aluminum maker United Co. Rusal’s stock plunged about 40%, while prices of the metal surged, after US sanctions on the company and its billionaire owner Oleg Deripaska prompted the producer to warn of potential debt defaults and “materially adverse” consequences.

The stock fell to HK$2.81 on Monday, according to pricing from the Hong Kong Exchanges & Clearing website. Aluminum prices jumped as much as 2.5% to $2 092 a metric ton on the London Metal Exchange, extending a 1.6% gain in the previous session, as investors bet on supply disruptions.

The US Treasury on Friday included Rusal and seven other Deripaska-linked firms in a list of 12 Russian companies hit with sanctions that it said were intended to punish the country for actions in Crimea, Ukraine and Syria, and attempting to subvert Western democracies. The company, also listed in Moscow, is the biggest aluminum maker outside China, and the measures could hurt access to financial markets and disrupt shipments to world buyers.

“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 Daniel Hynes, senior commodities strategist at Australia & New Zealand Banking Group. “Rusal’s export-driven revenue is substantial and you have to put some sort of doubt over that supply. It’s raising the supply risk premium.”

The sanctions may result in technical defaults on some credit obligations and be “materially adverse to the business and prospects of the group", Rusal said Monday, adding its annual report may also be delayed. “The company’s primary focus remains its business and, most importantly, all of its global customers, investors and partners. The company will continue to ensure it abides by all applicable laws and regulations.” Rusal accounts for about 17% of supply outside of China, according to Harbor Intelligence.

The US actions directly target Russian oligarchs whose companies have wide-ranging involvement in international capital markets. Russia’s Foreign Ministry is working on measures to respond to the sanctions, ministry spokeswoman Maria Zakharova said on a state television channel, according to state news agency Tass. “We have a whole list of possible measures that are being studied,” Tass cited Zakharova as saying.

The move also raises some questions for Glencore and its billionaire chief Ivan Glasenberg. The commodity giant is one of the top shareholders in Rusal and Glasenberg sits on the company’s board, while the company’s also the biggest buyer of Rusal’s metal.

Aluminum, used in everything from aircraft to beer cans, has lost about 8% on the LME this year on concerns about rising shipments from China, where producers could stand to benefit by filling the supply gap left by Rusal.