LONDON—Aluminum prices on the London Metal Exchange shrugged off a decision by the United States to impose steep tariffs on Russian metal on Friday, though traders said prices would have jumped if the U.S. had imposed sanctions instead.
One year on from Russia’s invasion of Ukraine, the United States said it would impose a 200 percent tariff on aluminum produced in Russia from March 10, effectively a ban on Russian aluminum imports to the country.
Benchmark aluminum on the London Metal Exchange (LME) was down 2.2 percent at $2,342 a ton at 1730 GMT after touching $2,321.5, its lowest since January 9.
“The game-changer would have been if the U.S. had imposed sanctions on Russian aluminium,” an aluminum trader said. “Sanctions would have meant that not many [consumers or traders] elsewhere in the world would touch Russian aluminium.”
Russian aluminum producer Rusal accounts for about 6 percent of global supplies estimated at around 70 million tons this year.
Rusal declined to comment.
In 2018, U.S. Treasury Department sanctions on Rusal froze the bulk of the company’s exports, paralyzed its supply chain and scared off customers. The United States lifted these sanctions on Rusal early in 2019.
The sanctions imposed in 2018 triggered a spike in LME aluminum prices and in the duty-paid physical premium paid by buyers in the spot market in the United States on top of the LME prices.
U.S. aluminum premiums at around $650 a ton are up more than 40 percent since October when talk of tariffs on Russian metal began.
U.S. imports of unwrought aluminum and alloys from Russia amounted to 191,809 tons, or roughly 4.4 percent of the more than 4.4 million tons total last year, compared with 8.9 percent in 2018 and 14.6 percent in 2017, according to Trade Data Monitor.
“[U.S.] import levies on Rusal’s aluminum unlikely to make any real difference to the market in the United States,” an analyst at a commodities focused funds said.
“Aluminium and other base metals are completely focused on the macro picture today. The dollar is having a good run and that’s not good for metals.”
