The American sanctions against Russia hit the oligarch Oleg Deripaska and Rusal, the largest metal supplier outside of China, with extreme severity, accordingly to Reuters.
The long chain of reactions to the measures taken by Washington in April have probably escaped the control of the administration of Donald Trump.
The whole aluminum supply chain is in chaos and this state of affairs is causing heavy consequences all over the world. Also in the United States themselves.
On a global level (including China), the American group is now expecting an aluminum deficit of between 600 thousand and one million tonnes in 2018, an increase compared to 300-700 thousand tons that it had forecast three months ago.
As for alumina, an intermediate material obtained from bauxite, Alcoa fears that it may miss the appeal from 300 thousand to 1.1 million tons. The supply is scarce not only because of the difficulties of Rusal, but also for the cutting of production in the Brazilian Alunorte maxi-refinery, linked to a case of environmental pollution, and the price has already risen by more than 80% from the announcement of sanctions.
All this is further complicated by the inflammation of nickel prices, metal used in stainless steel and batteries for electric cars.
Apparently the market is already looking for a soul: apparently Rusal is already moving to look for triangulations with China. Beijing itself – ironically, visas of anti-dumping duties against its aluminum – could fill the likely metal shortages in the Western world.
However, price tensions risk continuing for some time, with possible effects on inflation. Even more so because the rally is added to that of oil, which has risen – for reasons that have nothing to do with duties and sanctions – at the highest level since 2014.
The geopolitical tensions are skyrocketing and the oversupply that for years had been the ballast of prices has disappeared, but Opec and Russia do not seem willing to withdraw or reduce production cuts.
