Russian aluminum producer Rusal, responded on Monday to the new sanctions imposed by the United States and Britain, which prevent metal-trading exchanges from accepting Russian aluminum, copper, and nickel produced after April 13 and restrict their import into these countries.
Despite these measures, Rusal stated that its operations would remain unaffected.
Washington and London announced the sanctions last Friday, aiming to disrupt Russian export revenues amid ongoing tensions related to Russia’s military actions in Ukraine.
In response, the London Metal Exchange (LME) moved quickly to comply, banning Russian metals produced on or after the specified date from its systems.
The Kremlin criticized the sanctions as illegal and counterproductive, arguing they would harm the interests of the sanctioning countries as well.
Rusal, which holds a significant 5.5% share of the global aluminum market and is the largest producer outside China, reassured stakeholders by stating, “The announced actions have no impact on Rusal’s ability to supply since Rusal’s global logistic delivery solutions, access to banking system, overall production and quality systems are not affected.”
They also noted that the U.S. sanctions do not introduce “any new prohibitions or requirements relating to the processing, clearing or sending of payments by any intermediary banks.”
The sanctions have not directly targeted Rusal or Norilsk Nickel, another major Russian mining company and the world’s largest palladium producer.
Despite the restrictions, the proportion of Russian aluminum in LME-approved warehouses remained high at 91% in March, with copper at 62% and nickel at 36%.
The market reacted to the sanctions with a sharp increase in aluminum and nickel prices, although they later stabilized.
Goldman Sachs analysts commented on the situation, explaining, “From a fundamental perspective, it is important to recognise that these exchange focused rule adjustments will not generate a necessary supply-demand shock.”
They noted that Russian producers could still access markets outside the U.S. and UK, such as China and India, where they have significantly increased their exports.
Rusal clarified that the LME’s actions relate specifically to exchange and derivatives, affirming their ability to continue providing hedging services and committing to market-based pricing.
Meanwhile, market analysts from Promsvyazbank observed a slight decline in Rusal’s stock prices, indicating that the market was still digesting the implications of the sanctions.
They suggested that shipments from Rusal and Norilsk Nickel might decrease, potentially leading to new discounts on exchange prices.
Norilsk Nickel has yet to issue a statement regarding the sanctions.