March 10, 2022

Rusal’s export market might change in the coming years if it partners with Chinese aluminum producers. Early this week Bloomberg reported that several state-owned Chinese metals and energy companies are seeking stakes in major commodities firms, including Rusal.  Rusal is the largest aluminum producer outside of China. These potential ventures are meant to strengthen China’s energy and metals security, according to Bloomberg.

China already heavily relies on Russian aluminum. Last year, approximately 18.4% of China’s primary aluminum imports came from Russia, according to Chinese customs data. Similarly, approximately 7.5% of Rusal’s aluminum exports were shipped to China that year, based on Rusal and Chinese customs data.  Rusal’s exports to China might increase if a state-owned Chinese aluminum company invests in Rusal. However, this might have little effect on aluminum prices in the short term.

Consumers who are concerned about their aluminum input costs might consider purchasing 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. (3/10/22)

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