April 21, 2022

China rarely exports alumina; however, the country exported 9,949 mt of alumina to Russia last month, up from 104.5 mt in March 2021, according to China customs data and Reuters. Exports are small compared to total production; it exported 12,955 mt of alumina in March but produced over six million mt according to Reuters. Late last month, Bloomberg, citing anonymous traders, reported that China was testing “whether the cargoes face any logistics issues or problems with sanctions, with more ready to ship if all goes well.” Russia’s aluminum producer, Rusal, is currently having problems with sourcing alumina due to logistical issues from the Ukrainian conflict and Western sanctions.

Consumers who are concerned about their aluminum input costs should consider financial swaps or purchasing call options. Such positions are standard for consumer hedging, but they can result in opportunity costs or cash costs if metal prices decline. Please contact AEGIS for specific strategies that fit your operations. (4/21/2022)

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