US and UK target Russia's metal trade with embargo, aiming to cut Kremlin revenue
13 April 2024 13:38
On Friday, the USA and the United Kingdom announced a ban on importing aluminium, copper, and nickel from Russia. These metals were also withdrawn from trading on the stock exchanges in London and Chicago. The goal of the embargo was to deprive the Kremlin of income from the metals trade, which had not yet been subjected to sanctions.
The ban takes effect on April 13. From that moment, the import, export, and re-export of aluminium, copper, and nickel originating from Russia will be prohibited. It will also not be possible to trade these raw materials on exchanges in London and Chicago. However, the restrictions will only apply to raw materials extracted after the decision to impose the embargo.
As stated in a joint statement by the finance ministers of both countries, Janet Yellen and Jeremy Hunt, the embargo is intended to disrupt Russian revenues from metal trading.
By taking this action in a targeted and responsible manner, we will reduce Russia’s earnings while protecting our partners and allies from unwanted spill-over effects," Yellen said.
Russia's trade with Europe diminishes, but increases with Asia
Russia is currently the second-largest producer of aluminium in the world, managed by the Russian company Rusal. However, just like other Russian companies, the enterprise has recently reduced the scale of trade with Europe and increased it with Asia. In the first half of 2023, the company generated $1.87 billion in revenue in Europe, which is $1 billion less than the previous year. During this time, revenues in Asia increased by 22.4% to $1.98 billion.
One of the primary recipients of aluminium from Russia is China. The import of Russian material into this country increased following the invasion of Ukraine. For this reason, in April 2023 alone, Russian sales of refined aluminium to China nearly tripled to 98,097 pounds (approximately 44,500 kg) compared to the previous period, according to Chinese customs data.
Interestingly, China is also the most significant global producer of aluminium. At the same time, due to high consumption in the country, it is forced to import it.
