The US announced new action against Russia’s metals and mining sector that include measures it said will significantly increase the cost of importing Russian aluminum.
The White House will raise tariffs on more than 100 Russian metals, minerals and chemical products worth $2.8 billion to Russia, it said Friday in a statement announcing a fresh round of measures to mark the one-year anniversary of the invasion of Ukraine.
The measures will “significantly increase costs for aluminum that was smelted or cast in Russia to enter the US market,” it said, without immediately giving further details. Bloomberg previously reported that the US was preparing to impose a 200% import tariff on Russian aluminum.
While the US and Europe have imposed sweeping sanctions on Russia in response to the invasion of Ukraine, industrial metals like aluminum have largely avoided blanket restrictions. A tariff was the least severe of several options contemplated for months by the Biden administration.
Traders are closely watching the detail of any tariffs or sanctions to see whether they will affect aluminum markets outside the US. Russian supplies typically account for about a 10th of US imports, though most of it is value-added items, rather than in bulk product, with US buyers ranging from the construction to automotive sectors.
“We think this will likely have a limited impact on the global aluminium market,” said Ewa Manthey, a commodity strategist at ING Groep NV. “If the US were to go the sanctions route, it would have a more severe impact on the market.”
Action against Russia’s aluminum received fervent support from US producers, led by Alcoa Corp. The White House also said Friday it was “expanding its sanctions authorities to Russia’s metals and mining sector,” but that the move would be tailored to minimize market disruption.
Aluminum futures on the London Metal Exchange declined 1.4% by 11:43 a.m. local time. Other metals were also mostly lower.
The LME — the world’s top bourse — had also weighed a ban on new deliveries of Russian raw materials, before deciding against it in November. Since then stockpiles in key hubs for the country’s products have surged, stoking fear the market could be distorted.
(By Jack Farchy and Eddie Spence)