The barrier has found a hero

The United States abandoned the idea of ​​repeated sanctions against Rusal, choosing the most benign option for the world market with a 200% duty on Russian aluminum. This will completely stop the supply of Russian metal to the United States, but, according to analysts, Rusal will be able to redirect the insignificant volumes that came to North America to Asian markets. China is becoming one of the main buyers of metal.

US to impose 200% duty on Russian aluminum imports, agency says Bloomberg with reference to sources. This move has been under consideration for several months and will lead to a complete halt in the supply of Russian metal, which accounts for 10% of all US imports.

The interlocutors of the agency explained the need for duties by the fact that Russian companies, in their opinion, are engaged in dumping on the US market, causing damage to local producers.

In September 2022, Rio Tinto CEO Jacob Stausholm spoke of Russian aluminum as the leader in the US market. The flow of Russian aluminum makes it very difficult to have a profitable aluminum industry in North America, he said. In addition, he considered it strange that North American buyers continue to import Rusal’s aluminum.

The tariff option is the least disruptive for the global aluminum market, as the US administration considered not only an embargo on Russian metal, but also sanctions against Rusal, the largest aluminum producer outside of China.

The market has not forgotten how, in 2018, the imposition of US sanctions against the company provoked a shortage in world markets and caused a 29% increase in aluminum prices. Last year, amid reports of US sanctions plans, a number of European business associations spoke out against restrictions on Russian aluminum, as this would inevitably jeopardize the work of European companies. Rusal declined to comment.

From a statistical point of view, the American market was not the key one for Rusal. The company’s report for the first half of 2022 says that America’s share of revenue was 7% ($497 million) versus 9% in the first six months of 2021. The markets of Europe, CIS and Asia accounted for 40%, 29% and 23% respectively.

As the data of the US Census Bureau show, the volume of Russian aluminum imports did not change significantly ($605 million for 11 months of 2022 against $612 million for the whole of 2021, TNVED 76).

Analysts interviewed by Kommersant call the volume of imports to the US insignificant.

At the same time, “according to statistics, in December 2022, China increased aluminum supplies from Russia by 48% compared to the same period last year (65% of total imports),” says Boris Krasnozhenov from Alfa Bank. In 2022, Russia supplied $1.3 billion worth of aluminum to China, up from $800 million in 2021. In October 2021, Rusal’s deputy general director Roman Andryushin stated that China’s share in the company’s sales book could grow to 15–20% in 2022 from no more than 10%. In 2021, according to him, Rusal was supposed to supply 300-400 thousand tons of aluminum to the Chinese market.

According to Boris Krasnozhenov, the United States can increase its own production of primary aluminum, having the necessary capacities, but the cost of the metal will be quite high. Canada is the largest exporter of aluminum to the US.

Sergei Grishunin from the NRA believes that exports will not decline drastically, as Rusal in 2018 demonstrated the ability to diversify export flows. In addition, the company produces metal with minimal CO2 emissions. At the same time, the analyst fears that with such a statement, the US is trying to provoke the EU to adopt a prohibitive duty. In this case, supplies of 1.2 million tons will be at risk.

Evgeny Zainullin