The market had expected that the US sanctions on Rusal would be removed in August, two months before the US government’s deadline for companies to wind down their contracts with the producer. The sanctions were imposed on April 6 for reasons which included Russia’s annexation of Ukraine’s Crimea peninsula.
But with a little more than one month to go before the October 23 deadline, and no sign of sanctions ending, market participants now expect premiums in Europe to rise. Buyers are starting to scramble to secure metal in an already-tight market for the rest of 2018 and into 2019.
Duty-unpaid aluminium premiums in Rotterdam on an in-warehouse basis were assessed on September 6 at $82-92 per tonne, steady since August 22. Prompt deals were reported at $85-90 per tonne throughout the week and most offers were around $90-95 per tonne.
But if the Rusal situation remains unchanged through the duration of the Metal...