By Bob Tita
Alcoa says last weeks decision by the U.S. and U.K. to ban imports of Russian aluminum will help alleviate unwanted Russian aluminum from distorting the global market price for the metal.
Weve been supporting this type of action and really advocating for it for a couple of years now, Chief Executive William Oplinger said late Wednesday during a conference call with analysts.
Since the start of Russias war against Ukraine in 2022, many aluminum buyers in the West have voluntarily avoided aluminum from Russia. As a result, Russian aluminum exports have piled up in a network of warehouses operated by the London Metals Exchange that function as a buyer of last resort.
Alcoa said about 90% of the aluminum in the warehouses currently is from Russia. High tariffs and other restrictions on Russian aluminum in the U.S. and Britain have made it difficult to trade the metal in major markets.
The illiquid Russian aluminum has been a drag on the LME price for aluminum that serves as the global benchmark, according to market analysts.
You had a global pricing mechanism that lost its credibility because it was based on a product that wasnt widely accepted in the market, Oplinger said. The ban reestablishes the credibility of the benchmark price.
The LME cash price was up 2.7% at $2,581 per metric ton.
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(END) Dow Jones Newswires
April 18, 2024 13:45 ET (17:45 GMT)
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