LONDON, Feb 24 (Reuters) - Aluminium prices on the
London Metal Exchange shrugged off a decision by the United
States to impose steep tariffs on Russian metal on Friday,
though traders said prices would have jumped if the U.S. had
imposed sanctions instead.
One year on from Russia's invasion of Ukraine, the United
States said it would impose a 200% tariff on aluminium produced
in Russia from March 10, effectively a ban on Russian aluminium
imports to the country.
Benchmark aluminium on the London Metal Exchange
(LME) was down 2.2% at $2,342 a tonne at 1730 GMT after touching
$2,321.5, its lowest since January 9.
"The game-changer would have been if the U.S. had imposed
sanctions on Russian aluminium," an aluminium trader said.
"Sanctions would have meant that not many (consumers or traders)
elsewhere in the world would touch Russian aluminium."
Russian aluminium producer Rusal accounts for about 6% of global supplies estimated at around 70
million tonnes this year.
Rusal declined to comment.
In 2018, U.S. Treasury Department sanctions on Rusal froze
the bulk of the company's exports, paralysed its supply chain
and scared off customers. The U.S. lifted these sanctions on
Rusal early in 2019.
The sanctions imposed in 2018 triggered a spike in LME
aluminium prices and in the duty-paid physical premium paid by
buyers in the spot market in the United States on top of
the LME prices.
U.S. aluminium premiums at around $650 a tonne are up more
than 40% since October when talk of tariffs on Russian metal
began.
U.S. imports of unwrought aluminium and alloys from Russia
amounted to 191,809 tonnes, or roughly 4.4% of the more than 4.4
million tonnes total last year, compared with 8.9% in 2018 and
14.6% in 2017, according to Trade Data Monitor.
"(U.S.) import levies on Rusal's aluminium unlikely to make
any real difference to the market in the United States," an
analyst at a commodities focused funds said.
"Aluminium and other base metals are completely focused on
the macro picture today. The dollar is having a good run and
that's not good for metals."
(Reporting by Pratima Desai and Polina Devitt; editing by
Elaine Hardcastle)
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