Exclusive: EU, US ramp up Russian aluminum and nickel imports since Ukraine war

Aluminum blocks are seen at Wagner Automotive Industry in Gradacak, Bosnia and Herzegovina, February 8, 2022. REUTERS/Dado Rović/File Photo

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  • The European Union and the United States have largely exempted Russia’s mineral sector from sanctions
  • EU raises imports of Russian aluminum by 13% in March and June
  • US shipments of Russian nickel rose 70% in March and June

Data showed that the European Union and the United States stepped up purchases of key industrial minerals from Russia, despite logistical problems caused by the war in Ukraine and hard talk about depriving Moscow of foreign exchange earnings.

The metal shipments highlight the West’s difficulty in putting pressure on the Russian economy, which has performed better than expected and seen the ruble rise as booming oil revenues helped offset the impact of sanctions. Read more

Official trade data compiled by Reuters from the UN Comtrade database showed that EU and US imports of Russia’s key base metal products such as aluminum and nickel during the March-June period increased by up to 70%.

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The data showed that the total value of EU and US imports of miners in the March-June period was $1.98 billion.

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

“Although we do not review our sanctions measures, there is nothing on the table to increase the cost of Putin’s unwarranted war against Ukraine,” a US State Department spokesperson said in response to a Reuters query.

The European Commission did not provide any comment after the request.

Analysts said that the United States and Europe have learned lessons after the massive disruption in the construction, auto and energy sectors due to the sanctions imposed by former US President Donald Trump on Russian aluminum 2018. Read more

These penalties were lifted the following year.

Prices of both metals soared to record levels shortly after Russia launched its invasion of Ukraine on February 24 due to concerns that sanctions or difficult logistics could prevent shipments.

But these fears are unfounded, as data shows that Russian exports during the March-June period were relatively strong.

“The mechanics of the market are working,” said Karsten Minke, analyst Julius Baer, ​​referring to shipments of Russian metals.

“We know from commodity traders that it’s mainly about price. It’s not so much that some politicians don’t want to buy, but there’s a bargain here.”

More aluminum

Russia’s Rusal is the world’s largest aluminum producer outside of China and accounts for about 6% of the estimated global production.

During the four months following the Russian invasion of Ukraine, the European Union was the largest importer of unwrought aluminum from Russia, withdrawing an average of 78,207 tons per month in March and June, up 13% over the same period last year.

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Rotterdam, Europe’s largest port, said in a report that overall volumes rose 0.8% in the first half of 2022, but “cargo fragmentation” – goods that do not fit in containers – rose sharply by 17.7%, driven by higher imports of minerals.

A port spokesman told Reuters that aluminum and nickel shipments were still arriving at the port because they were not subject to sanctions, but declined to give any numbers.

On Tuesday, a division of the Norwegian Norsk Hydro (NHY.OL) It said it would exclude Russian metals from its 2023 aluminum purchases. READ MORE

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

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“For Americans, it is very important that they have access to as many different sources of aluminum as possible,” said Tom Price, head of commodity strategy at Liberum.

“They are very reluctant to get any metal from China, as exports are shrinking, so Rusal Aluminium is very important, which is why this trade has not been closed.”

Total shipments were relatively flat.

Russian aluminum imports to the seven major destinations last year in the March-June period averaged 221,693 tons per month, 9% lower than the same period last year, but 4% higher than the average Monthly for the whole of 2021.

US nickel shipments rise

In nickel, Russia accounts for about 10% of world production and Nornickel for the country (GMKN.MM) It makes about 15%-20% of the nickel used to make batteries in the world.

Nickel imports from Russia by the top three destinations in March and June rose 17% year on year.

The United States saw the biggest gains, jumping 70% from a year ago, while shipments to the European Union increased 22%.

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Reuters graphics

Analysts said the price jump in the wake of the invasion provided additional incentive to continue exports.

The LME’s nickel standard doubled to a record high above $100,000 a ton on March 8, prompting the LME to suspend trading and cancel deals.

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Reporting by Eric Onstad. Additional reporting by Si Liu in Beijing and Daphne Psalidakis in Washington. Editing by David Evans

Our criteria: Thomson Reuters Trust Principles.

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