Gold Silver Reports (GSR) – Rusal Sanctions Lifted, But U.S. Aluminum Users Still Face Import Levy — The U.S. Treasury on Sunday lifted sanctions on the core empire of Russian tycoon Oleg Deripaska, including aluminum giant Rusal and its parent En+, despite a Democrat-led push to maintain them.
Aluminum users around the world will pay less for their material after the United States lifted sanctions on major producer Rusal, but U.S. tariffs on imports of the metal mean limited gains for the country’s consumers.
That pushed aluminum prices on the London Metal Exchange down 2 percent on Monday to near $1,880 a tonne.
Prices of the metal used widely in transport and packaging have dropped 30 percent since hitting a seven-year high of $2,718 a tonne in April, after the imposition of sanctions.
“Since the first time the deadline was extended, the market started to price in the idea that sanctions would be lifted eventually,” Julius Baer analyst Carsten Menke said.
The United States extended several times its deadline for U.S. consumers to wind down business with Rusal.
“U.S. tariffs on aluminum imports mean U.S. manufacturers will pay more than consumers in Europe,” Menke said. “But from a global supply perspective, U.S. tariffs don’t matter so long as the motivation to ship exists.”
Tariffs mean producers need a strong incentive to sell to U.S. consumers and this can be seen in the physical market premiums that are paid above LME aluminum prices.
The premium for shipping to the United States stands at around $0.19 a lb or $420 a tonne, double the $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.
