Ukraine conflict: Hong Kong-listed aluminium giant Rusal’s shares plunge after Australia bans export of key materials to Russia
- Ban follows Australian sanctions last week against Russian billionaire Oleg Deripaska, who owns a 56.9 per cent stake in Rusal through EN+ Group
- It is increasingly likely that the only option for Rusal to source alumina will be via purchases through Chinese entities, Wood Mackenzie analyst says
The ban – part of sanctions against Moscow for its invasion of Ukraine – on shipments of bauxite ore and intermediate product alumina was imposed on Sunday. Given that Russia relies on Australia for about 20 per cent of its alumina needs, the ban will limit Russia’s capacity to produce aluminium, Canberra said, adding that it would work with exporters to find new markets.
“The company is currently evaluating the effect of the above and will make further announcements following further evaluation of the situation, if and when it is necessary or required,” Rusal said in a filing to the Hong Kong bourse on Monday.
Rusal, the world’s second-largest aluminium producer, produced 8.18 million tonnes of alumina and 3.76 million tonnes of aluminium in 2020, according to the latest announced annual figures.
A halt in alumina shipments would not mean an immediate cut in smelter output, although it would worsen the tight supply in Russia, which had weeks of alumina stocks on site rather than months, according to Ami Shivkar, principal analyst on commodities consultancy Wood Mackenzie’s aluminium team. It would also cause supply bottlenecks in the supply chain as materials are diverted to make up for shortfalls.
