Russian aluminium will carry an export duty of 15% plus $254 per tonne from August 1 through December 31, the Russian government's press service confirmed.
Export duties
were approved on 340 non-ferrous and steel products, after Russian Prime Minister Mikhail Mishustin signed an official decree last Friday June 25.
Primary aluminium, under harmonized system code 760110, will also be taxed.
Some more specific aluminium alloys were included in the list, but notably, products such as aluminium bar, rod and profiles were not targeted.
The duty carries a 15% base rate and a specific rate of $254 per tonne.
The
London Metal Exchange's three-month aluminium contract closed at $2,470 per tonne last Friday, up by 1.9% from a day earlier.
Ahead of the decision, aluminium market participants in the United States and Europe said the duties would boost regional aluminium premiums across the globe, which are already at record highs.
Fastmarkets assessed the
aluminium P1020A premium, in-whs dp Rotterdam at $250-260 per tonne last Friday, up by 2% week on week from $245-255 per tonne a week earlier.
In the US, the premiums for both primary aluminium and billet continue to rise to new highs.
Fastmarkets'
aluminium P1020A premium, ddp Midwest US rose to an all-time high of 27.5-28.5 cents per lb last Friday.
The
aluminium 6063 extrusion billet premium, delivered Midwest US was assessed at an all-time high of 19-23 cents per lb on June 18.
Russia has not been a major supplier of primary aluminium to North America in recent years. Instead, it had been selling mainly value-added aluminium products to this market.
But Russia still sells significant volumes of primary aluminium to Europe and Asia.
And the US Midwest premium would need to rise if premiums in Rotterdam and Japan strengthen, several traders said.
"It will [increase] the Midwest premium because of the lack of metal. Who would pay 10 cents more? If this happens, it's going to create the biggest imbalance of supply and demand," one trader said.
The day before the duties were confirmed, ED&F Man's head of commodities Edward Meir said, "Similar tax proposals are being crafted in both Peru and Chile as well, with all of these having one thing in common - if passed, the taxes will almost certainly be passed on to the consumer in the form of higher premiums or prices, or both."
The duties will not be applied to Russia's aluminium exports to countries within the Eurasian Economic Union - Armenia, Belarus, Kazakhstan and Kyrgyzstan.
The Russian government's press service said on Friday: "The introduction of duties will make it possible to mitigate the influence of external conditions on the domestic market, and to adjust prices for metals and metal products."
In 2018,
US Treasury sanctions targeting Russian aluminium producer UC Rusal and its former president Oleg Deripaska created shockwaves across the global aluminium market from the sudden supply disruption.
Rusal is the world's largest aluminium producer outside of China. The company operates nine aluminium smelters with a combined production capacity of 3.76 million tonnes.