Asia's aluminium buyers brace for higher premiums when Russia tax bites

Market sources in Asia were still weighing the news of Russia’s plan to impose an export tax on ferrous and non-ferrous products, but there were growing expectations on Monday July 5 that the fourth-quarter premium for aluminium imports on a cif main Japanese ports (MJP) basis would rise even higher than the current level.

Russian aluminium will carry an export duty of 15% with a minimum rate of $254 per tonne from August 1 until December 31, the Russian government's press service has confirmed
The new tax comes with both spot and MJP premiums having increased significantly in recent months. Some sources believed that aluminium prices in Asia have already peaked, especially with the Chinese arbitrage window turning negative in the last week of May. The tax, however, will raise prices even further, even though demand has not picked up significantly, pushing traders to hurriedly readjust their strategies.

Russia sells significant volumes of aluminium into Europe and Asia, and while several market participants were watching to see how the added duty...


Liz Ng

July 06, 2021

08:29 GMT