The European Commission is set to propose a ban on imports of Russian primary aluminium as part of its 16th sanctions package against Russia, following its invasion of Ukraine. This move is expected to be finalized in February, coinciding with the third anniversary of the conflict.
Key Highlights:
Sanctions Overview:
The proposed ban on Russian aluminium is part of ongoing efforts by the EU to tighten restrictions on Russian trade.
EU diplomats indicated that the ban will be phased in, allowing for a gradual implementation.
Background:
In a letter sent late last year, 10 EU countries advocated for further sanctions on Russian metals, including aluminium.
To date, the EU has already banned certain aluminium products like wire, tubes, and foil, which constitute less than 15% of its aluminium imports.
Market Impact:
Aluminium is increasingly favored in industries such as transport, packaging, and construction, particularly for electric vehicles due to its lightweight properties.
Following the announcement, the LME benchmark aluminium price initially rose to $2,602 a ton before settling down by 0.1% to $2,576.50 by 1715 GMT.
Import Trends:
EU imports of Russian primary aluminium have decreased significantly over the past two years. From January to October last year, imports totaled over 130,000 metric tons, accounting for about 6% of the EU’s total aluminium imports.
This is a notable decline from 11% in 2023 and 19% in 2022.
Future Supply Dynamics:
With the potential ban, EU and U.S. companies may seek alternative supplies from the Middle East, particularly from countries like the United Arab Emirates and Bahrain, which produced nearly 9% of global aluminium supply in 2024, according to the International Aluminium Institute.