LONDON/MELBOURNE (Reuters) – Dominant aluminum producer China may help fill a gap in global supply after the United States slapped sanctions on Russia’s aluminum giant Rusal.
But a tangle of tariffs will obstruct flows to the United States so aluminum consumers will need to find other solutions as well, industry experts said.
International prices, which have shot up more than 10 percent since the sanctions were announced, will have to rise further to lure exports from China, whose metal faces a range of tariffs and duties.
“China is the only place with surplus material, so that’s where we need to incentivize that excess supply to be shipped to the U.S.,” said Robin Bhar, head of metals research at Societe Generale in London.
Rusal accounts for about 14 percent of world aluminum production outside China. Global flows of the metal, which were already shifting after the United States imposed import tariffs on steel and aluminum, will need to further contort to supply the 65-million tonne a year market.