EXCLUSIVE EU and US ramp up Russian imports of aluminum and nickel since war in Ukraine

EXCLUSIVE EU and US ramp up Russian imports of aluminum and nickel since war in Ukraine

Aluminum blocks are seen in the Wagner car industry in Gradacac, Bosnia and Herzegovina February 8, 2022. REUTERS/Dado Ruvic/File Photo

Join now for FREE unlimited access to Reuters.com

  • EU and US largely spared Russian metals sector from sanctions
  • EU increases Russian aluminum imports by 13% in March-June
  • US shipments of Russian nickel soar 70% in March-June

LONDON, Sept 6 (Reuters) – The European Union and the United States have stepped up purchases of key industrial metals from Russia, data showed, despite logistical problems caused by the war in Ukraine and bitter talks over the depriving Moscow of foreign currency revenue.

The metal shipments highlight the West’s difficulty in putting pressure on Russia’s economy, which performed better than expected and saw its ruble soar as strong oil revenues helped offset the impact of sanctions. Read more

EU and US imports of Russia’s main metal commodities, aluminum and nickel, rose 70% between March and June, according to official trade data compiled by Reuters from the United Nations Comtrade database.

Join now for FREE unlimited access to Reuters.com

The total value of European and U.S. imports of the two metals from March to June was $1.98 billion, the data showed.

The West has imposed repeated waves of sanctions on a wide range of Russian products, people and institutions, but has largely spared the industrial metals sector.

A spokesman for the US State Department said in response to a Reuters question: “While we are not planning our sanctions, nothing is being ruled out to increase the price of Putin’s unwarranted war against Ukraine.” .

The European Commission did not provide comment after a request.

Analysts said the United States and Europe had learned lessons after huge disruptions in the construction, auto and power sectors caused by sanctions imposed by former US President Donald Trump on Russian aluminum in 2018. read more

These sanctions were lifted the following year.

Prices for the two metals hit record highs shortly after Russia launched its invasion of Ukraine on February 24, fearing sanctions or difficult logistics could block shipments.

But those fears were unfounded, as data shows that Russian exports from March to June were relatively strong.

“The market mechanisms are working,” Julius Baer analyst Carsten Menke said, referring to Russian metal shipments.

“We know from commodity traders that it’s mostly about price. It’s not so much about a politician not wanting you to buy, but is there a deal here.”

MORE ALUMINUM

Russia’s Rusal is the world’s largest aluminum producer outside of China, accounting for around 6% of estimated global production.

In the four months following Russia’s invasion of Ukraine, the EU was the largest importer of unwrought aluminum from Russia, averaging 78,207 tonnes per month in March-June , or 13% more than the same period last year.

Reuters Charts

Rotterdam, Europe’s biggest port, said in a report that total volumes increased by 0.8% in the first half of 2022, but that “bulk” – freight that does not fit in containers – fell sharply increased by 17.7%, driven by the rise in metal imports.

A port spokesman told Reuters aluminum and nickel shipments were still coming into the port as they are not sanctioned, but declined to give figures.

On Tuesday, a division of Norway’s Norsk Hydro (NHY.OL) said it would exclude the Russian metal from aluminum purchase deals for 2023. read more

Monthly U.S. imports of Russian aluminum averaged 23,049 tons in March-June, up 21% from the same period last year.

Reuters Charts

“For Americans, it’s very important that they get as many different sources of aluminum as possible,” said Tom Price, head of commodity strategy at Liberum.

“They are very reluctant to get metal from China, where exports are declining, so Russian Rusal aluminum is very important, that’s why they haven’t closed that business.”

Overall, shipments have been relatively stable.

Russian aluminum imports to the seven main destinations from March to June last year averaged 221,693 tons per month, 9% lower than the same period last year, but 4 % above the monthly average for all of 2021.

INCREASE IN NICKEL SHIPMENTS TO THE UNITED STATES

In nickel, Russia accounts for around 10% of global production and the country’s Nornickel (GMKN.MM) produces around 15-20% of the world’s battery-grade nickel.

Nickel imports from Russia by the three main destinations in March-June increased by 17% year-on-year.

The US saw the largest gains, up 70% from last year, while EU shipments rose 22%.

Reuters Charts Reuters Charts
Reuters Charts

A price spike after the invasion provided further incentive to continue exports, analysts said.

Benchmark nickel on the London Metal Exchange doubled to a record above $100,000 a tonne on March 8, prompting the LME to suspend trading and cancel deals.

Join now for FREE unlimited access to Reuters.com

Reporting by Eric Onstad; additional reporting by Siyi Liu in Beijing and Daphne Psaledakis in Washington; edited by David Evans

Our standards: The Thomson Reuters Trust Principles.

#EXCLUSIVE #ramp #Russian #imports #aluminum #nickel #war #Ukraine

Leave a Comment

Your email address will not be published.