August 2, 2022

China’s exports of alumina to Russia surged again last month. Of the 190,000 mt China exported, 184,000 mt, or 96.8%, went to Russia, according to Reuters and Chinese customs data. This marks the highest monthly Chinese alumina sale to Russia so far this year. China normally exports little alumina to Russia, as they only shipped 1,747 mt to them in 2021. However, logistical issues and sanctions from the Russia-Ukraine conflict have forced Rusal to seek out Chinese alumina. These alumina imports have helped Russia’s aluminum producer, Rusal, to keep aluminum production flowing.

Rusal’s ability to maintain a steady aluminum output has likely contributed to falling global prices in 2022. Aluminum extruders that are concerned about decreasing prices might consider hedges that provide downside protection, such as selling swaps or buying put options, both of which would establish a minimum price. Such positions are basic for producer hedging; however, they can result in opportunity costs or cash costs if metal prices increase. Please contact AEGIS for specific strategies that fit your operations. (8/2/2022)

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Price Indications

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