Australia issues export ban on alumina and bauxite to Russia
by David Fleschen
The aluminium price on the London Metal Exchange (LME) has temporarily jumped 5% to USD 3,550 per tonne at the start of the new trading week as supply concerns clearly have the upper hand. Yesterday, Australia imposed an export ban on alumina and other raw materials for the production of aluminium, such as bauxite, to Russia. According to data from the World Bureau of Metal Statistics, Australia is the world's largest producer of bauxite. In the case of alumina, it ranks second behind China, which is also by far the largest exporter of alumina. According to a report by the Bloomberg news agency, Russia, which depends on the import of alumina, has so far imported about 20% of its alumina needs from Australia. It takes about two tonnes of alumina to produce one tonne of aluminium. It takes about two tonnes of bauxite to produce one tonne of alumina. According to its own information, the largest Russian aluminium producer, which is particularly affected by the Australian sanctions, is still evaluating the effects of the export ban. It is not yet clear whether production will have to be cut back in the foreseeable future or whether the producer will be able to procure raw materials elsewhere. In our opinion, it is not a foregone conclusion that China will supply alumina to Russia, since China itself has imported alumina in recent years and hardly exported any, although it is the world's largest alumina producer. The Russian producer has not recently provided any information on the level of alumina inventories.
Nickel trading on the LME has not yet returned to order. This morning, too, the price recorded its largest possible daily loss ("limit-down"), extended to 15%, whereupon trading was suspended again shortly after the opening.
Source: Commerzbank Reserach, Photo: Market Steel