Aluminum Beaten Down by Russian Supply Uncertainties

SEATTLE (Scrap Monster): Aluminum had hit all-time record level of $4,073.50 per tonne in March this year, reacting to Russia’s invasion of Ukraine and the potential loss of supply of the metal from Rusal- the leading company in the global aluminum market.

It must be noted that Australia had banned the export of bauxite and alumina to Russia in the month of March this year. It was the only country to impose such a ban. This impacted the alumina supply from the Queensland Alumina joint venture. The closure of the Nikolaev refinery in Ukraine too impacted the alumia supply chain, thereby impacting the aluminum industry in Russia.

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The huge supply gap has been largely filled by Chinese producers, whose exports to Russia have witnessed dramatic surge. The alumina shipments by China to Russia has totalled 577,000 tonnes since March this year. This is significantly higher when compared with the exports of 1,250 tonnes and 1,750 tonnes during the comparable period in 2020 and 2021 respectively. Incidentally, China turned out to be a net exporter of the aluminum raw material for the first time since early 2019.

Meantime, several leading aluminum manufacturers including Novelis and Norsk Hydro hasve announced that they are unlikely to enter into new purchase contracts for the forthcoming year as well.