Bloomberg reports that the Joe Biden administration is considering a complete boycott of Russian aluminum in response to Russia’s military escalation in Ukraine.

According to the agency, which cites sources close to the decision-making process, the White House is considering a full ban, raising tariffs to such punitive levels that they would eventually translate into an effective boycott – or direct sanctions against Rusal International PJSC, the Russian company that produces it. industrial metal.

Kremlin-led attacks using more than 100 missiles have killed at least 26 people in Ukraine since Monday – the day Russian President Vladimir Putin ordered what he called retaliatory strikes against Ukraine after Kyiv, after he blew up a bridge in Crimea.

With the announcement of the prospect of such a boycott in North America, base metals prices soared, ending up adding 4.14% to $2,328.5 per tonne in the London market, having soared more than 5% – thus cutting the annual decline to 24.1%.

It should be remembered that aluminum prices fell by almost 50% compared to the record set in March (4100 USD), right after the Russian invasion of Ukraine. Since then, fears of a global economic recession and a slowdown in industrial activity have taken a toll on base metals.

Companies in the aluminum sector – such as Alcoa, in the US – have warned investors that rising energy and raw materials costs, along with lower metal prices, are putting pressure on their margins.

LME effect

Preventing further declines in the metal in recent days was the fact that the London Metals Market (LME) said it was assessing a potential boycott of the supply of industrial metals from Russia – which, if that happens, will lead to further disruptions. in the show.

A potential ban on Russian metals on the London Metal Exchange would be a seismic event for the industry, removing some of the world’s largest companies in the sector from the world’s largest market, according to Bloomberg.

The LME hasn’t made a decision yet, but last Thursday, October 6, it launched a three-week formal discussion process on whether to ban Russian metals – likely to start next month.

In practical terms, such a boycott could mean that metals from Russia – the country responsible for about 9% of global nickel production, 5% of aluminum and 4% of copper – could no longer be sent to network warehouses. LME Worldwide (which holds metals that are physically delivered when futures contracts expire).