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Scant relief for US aluminium users from removal of Rusal sanctions

Metal News - Published on Thu, 10 Jan 2019

Image Source: Yahoo Finance
Reuters reported that US plans to remove sanctions on Russian aluminium giant Rusal will be of limited benefit to consumers in the United States where tariffs on aluminium imports mean producers still need much higher prices to incentivise shipments. The US Treasury has said it would lift sanctions on Rusal this month after a restructuring that reduces tycoon Oleg Deripaska’s stake in parent company EN+ to below 50 percent.

Rusal, however, supplied only around 10 percent of the U.S. market in 2017. Canada with a more than 50 percent share is the largest supplier, and all producers still face 10 percent taxes on shipments to the United States.

A source at an aluminium producer said that “The tariffs will be paid by American consumers and the only winners are American primary (aluminium) producers who do not have to pay the duty. We can’t sell at a loss, premiums for exporting to the US need to stay high.”

Physical market premiums are paid above the benchmark price for aluminium, set on the London Metal Exchange at around USD 1,870 a tonne. That is down more than 30 percent from a seven-year high of USD 2,718 a tonne hit in April, when the sanctions were imposed.

The US premium at 19 US cents a lb or USD 420 a tonne is little changed from December 20 when the US Treasury announced the sanctions would be lifted.

It is double the USD 200 a tonne seen at the start of 2018 and about 20 percent above the levels at the time tariffs were announced in early March 2018.

Mr Eoin Dinsmore, an analyst at metals consultancy CRU said that “There is a little downside on US premiums. The February contract is around USD 400 a tonne. That’s the kind of level needed to take into account the duties, to attract metal.”

Source :

Posted By : Rabi Wangkhem on Thu, 10 Jan 2019
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