![]() But the company would be likely to be forced to sell at steep discounts and China itself is typically a net exporter, so an increase in volumes from Russia could eventually lead to a flood of Chinese aluminum into other Asian markets. Sanctions could lead to supply tightness and potential shortages in Europe, while accelerating a rerouting of metal into China, where Rusal sells in yuan. When the US Treasury sanctioned Rusal in 2018, European manufacturers played a significant role in successfully lobbying to have the sanctions removed, and the saga has been widely viewed as a political misstep that overlooked just how critical Rusal was to the global manufacturing supply chain. While some buyers have already been trying to avoid Russian metal, European factories are particularly reliant on specialized products that can be hard to substitute. Trading giant Glencore Plc has a vast multiyear contract to buy aluminum from Rusal. Rusal is a key supplier to manufacturers and traders around the world, but particularly in Europe. With the prospect of even more turmoil to come, here’s what traders are watching:Īny sanctions that make it difficult for Rusal to do business in dollars could have a profound impact on the global aluminum trade, where deals are largely priced in the US currency. The market was jolted again last month after Bloomberg reported the London Metal Exchange planned to discuss its own ban on new Russian supplies. Prices rocketed to a record in March but tumbled as the economic outlook soured. ![]() ![]() Aluminum, the most widely used base metal, has already had a tumultuous year. ![]()
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