The Ukraine-Russia War is Redefining the Aluminum Trade Route

Learn about how the Ukraine-Russia war is impacting the aluminum trade route. With the US imposing a 200% tariff on Russian-made aluminum, the country may have to replace the metal it imports from Russia with those from other suppliers, which will mean higher shipping costs.


A few years ago, the supply chain chaos caused by the US sanctions on Russian aluminum trade giant Rusal was still fresh in the memories of Western countries. At that time, the market faced challenges in all production chains, from bauxite to aluminum and basic metals. These memories have significantly hindered the flow of Russian metal to Western markets since Russia’s invasion of Ukraine. However, the situation is about to change for the US. The 200% tariff it has imposed on Russian-made aluminum to maintain pressure on Moscow may have serious consequences for aluminum trade. The import of Russian raw metal fell from over 30% of total imports to below 10% in 2016 and 2017. Nevertheless, Macquarie analysts say, “Tariffs may not have a significant impact on the declining volume of Russian metal in the country, but there may be potential consequences in other regions.”

This measure means an end to Russian aluminum, which accounts for 10% of total imports in the US. Eliminating Russian aluminum could lead to changes in trade and price. The imposition of sanctions may cause congestion in the Western aluminum market, which could increase prices. Currently, aluminum prices are about $2,450 per ton and $200 higher than at the beginning of the year. However, changes in physical premiums have been observed in the US. Premiums for Midwest delivery products have risen from $448 per ton compared to LME cash prices to as high as $600. With the imposition of sanctions, the country will have to replace metals it imports from Russia with those of other suppliers such as the Middle East, which will mean higher shipping costs.

New Business Relations Can Emerge Between Russia and Other States in the Region

On the other hand, Russian aluminum that cannot enter the US is likely to flow to China, India, and other regions. The influx of discounted Russian aluminum to Asia weakens premiums in countries like Japan. In other words, the increasing regional differentiation in the aluminum market strengthens premiums in the West while weakening them in the East.

The Ukraine-Russia War is Redefining the Aluminum Trade Route

Russia’s Nickel and Palladium Ace

If the US government imposes taxes on aluminum, experts warn that Russia could impose restrictions on the export of other critical metals such as nickel and palladium. According to experts, while Russian aluminum accounts for only a small portion of US supply, nickel is vital for the aviation industry and electric vehicle batteries. Meanwhile, palladium is a significant component for catalytic converters in gasoline-powered vehicles. According to Trade Data Monitor, approximately 11% of the 92,624 tons of nickel imported by the US last year came from Russia, and Russia provided 20 tons of palladium.

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