ShreeMetalPrices: US Targets Russian Metals, Primarily Aluminium With 200% Duties Imposed


The U.S. has expanded its economic sanctions against Russia to include the mining and metals industries. Aluminium would be struck the hardest, with 200% duties imposed on Russian metal imports beginning from March 10 and on any 3rd-country product incorporating Russian metal from Apr 10.

Other metal import duties, including those on copper, lead, and nickel, will increase to 70% and 35%, respectively.
A comprehensive set of trade restrictions and penalties covering more than 100 chemicals, metals & minerals was issued on the anniversary of Russia’s invasion of Ukraine.

The market’s immediate response was modest. The aluminium tariffs were widely anticipate, and they are unilaterally U.S. trade actions rather than official penalties like those that were momentarily impose on Russian manufacturer Rusal in 2018 with disastrous results.

Yet, they have compelled LME to halt all Russian metal delivery to its US warehouses, indicating additional fractures in the world market.

The LME has faced pressure to halt all shipments of Russian aluminium throughout its network of international warehouses. But the plan was reject in November.

The LME stated in a note on February 28 that it did not feel the most recent American declaration altered its stance because many American buyers have already “self-sanctioned” Russian metal. 400 tonnes of aluminium alloy are the sole Russian-brand metal that is currently stor in its U.S. warehouses. The NASAAC contract precludes the payment of any warrants for this metal.

No changes to the market will occur. There is not an available interest against this commodity, according to LME, and the contract hardly ever trades.

Russian aluminium will be wiped out ” U.S. Sanctions 200% Tarrifs”

The LME 3 month aluminium price is now trading at $2,405 per tonne. Near the lowest of its year-to-date range of $2,250-2,680 per tonne, completely ignoring previous developments.

In the hours following the February 24 decision. Cash metal saw a frenzy of selling in what seemed to be a wholesale dump of Russian brands by stock financiers.

As a result, the cash-to-3-months contango at the weekly close blew out to $50.50 per tonne, the highest since 2013. When there were more than 5 million tonnes of London Metal Exchange aluminium inventories in need of financing. On Wednesday, the difference somewhat decreased, with the time-spread ending the day priced at $44 per tonne.

The market is pleading with bankers to buy surplus metal, especially Russian metal, through this type of “hyper contango.
At the end of the Jan, Rusal aluminium inventories in LME warehouses were 93,750 metric tonnes. Or 41% of the total on-warrant stock of 231,120 metric tonnes.

After intense warranting activity at the ports of Gwangyang, Malaysia, kalng & South Korea (totaling 121,150 tonnes), on-warrant stockpiles have subsequently increased to 443,670 metric tonnes (107,900 tonnes).

According to reports, An extended off-take agreement with Rusal, is delivering Russian aluminium to Gwangyang. On February 22, the LME confirmed the listings of 3 more licensed warehouses in the port. All of which would run by ISTIM UK Ltd.

Trade barriers are not sanctions, and there’s no cause why this metal cannot obtain funding. Yet, the Friday cash price drop raises the possibility that the available liquidity has decreased.

Aluminium Futures & Other Metals Falling off “Could Hurt Supply Chain”

In order to inflict costs on Russia while keeping expenses to American consumers to a minimum. The U.S. says it had adjusted its import tariffs.

Asian customers may now purchase spot metal for a premium of $72 per tonne or at an even higher price if they have a quarterly supply agreement.
Pricing for aluminium is breaking down along regional fault lines as well as, in the case of the U.S., between base price and premium. Which now makes about a 5th of the “all-in” price for a physical customer.

As the tariffs will be applied to any aluminium product produce anywhere that contains Russian metal starting in April, American customers may be punished twice.
A vast variety of semi-manufacture goods are import into the US, including foil, tube, plate, wire, bars, and rods.

Yet it’s important to keep in mind that Rusal manufactures approximately 4 million tonnes of aluminium annually. With exports making up the majority of this production. The United States receives just a small portion of the tonnage as direct imports of unwrought metal.

Supplier nations may only escape if they slap at least 200% tariffs on their own imports of Russian aluminium.

As the West strives to reduce its reliance on China and Russia. It appears that aluminium is now a part of the larger geopolitical rift that is developing up across the range of important commodities.