Aluminum prices edged higher, reaching nearly $2,600 per ton in London, as the European Union considers implementing import restrictions on Russian aluminum and China’s production growth is anticipated to slow. The metal gained as much as 0.7%, buoyed by these factors.
The European Union is deliberating on imposing curbs on Russian aluminum imports, along with sanctions targeting other commodities, as part of a new package aimed at penalizing Moscow for its invasion of Ukraine, sources familiar with the matter revealed. These potential restrictions could be phased in gradually, with the exact scope still under discussion.
Since the onset of the war, Russian aluminum exports to Europe have already diminished, driven by widespread self-sanctioning by manufacturers and a global reshuffling of supply chains. As a result, more Russian metal has been redirected to China, which has increased its imports from Russia to over 1 million tons annually, more than doubling the figures since 2022.
Despite these shifts, the impact on trade volumes could be minimal, as the market has already adjusted to the changes. Gao Yin, an analyst at Shuohe Asset Management Co., noted, “The market isn’t in urgent need of Russian aluminum,” suggesting that any further trade rerouting would have limited effects.
In China, the aluminum sector is facing an inflection point in 2025, with production growth expected to slow due to new capacity limits, which will likely lead to less metal being available for export. This, in turn, could provide some support for aluminum prices, according to Shanghai Metals Market, as China remains the world’s largest aluminum producer.
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