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The Ukrainian-based Nikolaev alumina refinery, which is Rusal’s second-largest alumina refinery, has closed and ceased shipments, citing logistical challenges on the Black Sea and the surrounding area, according to Reuters. Alumina, a key ingredient for aluminum production, is produced in Nikoleav and shipped to three aluminum smelters in Russia. This alumina refinery supports 900,000 mt of annual aluminum output, or 23% of Rusal’s primary aluminum production, according to Wood Mackenzie. Rusal is the largest aluminum producer outside of China, with 3.76 million mt of production in 2020 or about 5.7% of world production, according to S&P Global and USGS data. Based on USGS data, approximately 97% of Rusal’s production is in Russia. This shutdown could hurt aluminum supplies from Russia and might drive aluminum prices higher. Consumers who are concerned about input costs might consider purchasing LME Aluminum swaps or call options. Please note that doing so might incur losses if prices decrease. Please contact AEGIS for specific strategies that fit your operations (3/2/22) |
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AEGIS Insights |
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02/16/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 02/15/2022: Section 232 Tariffs: Most relevant developments (AEGIS Reference) 11/30/2021: Will the Omicron COVID Variant Impact South African Metals Production or Exports? |
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| Important Headlines | ||
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3/1/2022: Russian miners hit by sanctions likely to get boot from FTSE 100 3/1/2022: Aluminium nears record high as Russia-Ukraine conflict threatens supplies 2/28/2022: Rusal halts alumina shipments from Ukraine 2/28/2022: Ukraine’s Ports to Stay Closed Until Russian Invasion Ends – Maritime Administration 2/28/2022: Invasion sparks EU flat steel supply concerns 2/25/2022: Ukraine ports and steel plants shut down: Update 2/24/2022: Invasion halts Ukraine steel shipments; appetite wanes for Russian steel |
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| Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program.
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