How Does US Sanctions Help China's Alumina Exports Soar 3.5%?

- Oct 29, 2018-

SMM News: US President Trump's strong tariff and sanctions policy has inadvertently helped China become a key exporter of aluminum. China's exports of alumina (used in the manufacture of aluminum) increased by nearly 3.5% year-on-year in September, and China quickly changed from a net importer of raw materials to an exporter. After the United States imposed sanctions on United Co. Rusal and imposed production restrictions on one of Brazil's largest alumina plants, global market buyers turned their attention to China due to supply concerns. According to BMO Capital Markets, “2018 will be the first year for China to become a net exporter of alumina in recent years. With the increase in production capacity, we believe that this may happen in 2019”. The once-unpredictable global alumina market has been in chaos this year. RUSAL's smelting business plays a key role in the global aluminum supply chain, the sanctions imposed by RUSAL and the impact of Norsk Hydro ASA's production constraints at the Arunorte plant in Brazil, resulting in significant aluminum prices Fluctuations, these have caused headaches for aluminum producers this year. In the case of Rio Tinto, the company said that this change in alumina prices would cost it about $300 million in an old contract for the supply of raw materials. The US Treasury Department asked RUSAL's controlling person, Deripaska, to give up control of RUSAL before December 12, or face sanctions. Among its assets is a large alumina refinery in Ireland that supplies a number of aluminum plants in Europe. Hydro said on Wednesday that the company is approaching a resolution to allow its Brazilian plant to resume full operation, but there is no exact timetable.