US and UK halt imports of key Russian metals, shaking global trade

On Friday, the USA and the United Kingdom banned importing aluminium, copper, and nickel from Russia. Additionally, these metals were removed from trading on the stock exchanges in London and Chicago. The embargo aims to strip the Kremlin of revenue from metal trade, which sanctions had not previously targeted.

The ban will take effect on April 13. From then on, importing, exporting, and re-exporting aluminium, copper, and nickel from Russia will be prohibited. Moreover, trading these raw materials on the London and Chicago exchanges will not be possible. However, the restrictions will only cover raw materials extracted after the decision to impose the embargo.

In a joint statement by finance ministers Janet Yellen from the USA and Jeremy Hunt from the UK, the embargo is designed to undercut Russian revenue from metal trading. Yellen highlighted, "By taking this action in a targeted and responsible manner, we will reduce Russia’s earnings while protecting our partners and allies from unwanted spill-over effects."

Russia, the world's second-largest aluminium producer via the company Rusal, has lately scaled back its trade with Europe in favour of Asia. In the first half of 2023, the company's European revenue totalled $1.87 billion, $1 billion less than the previous year. Meanwhile, its revenue from Asia saw a 22.4% increase to $1.98 billion.

China, as one of the main importers of aluminium from Russia, has seen a significant rise in imports following the invasion of Ukraine. In April 2023, Russian sales of refined aluminium to China nearly tripled to 98,097 pounds (about 44,508 kg), per Chinese customs data, compared to last year.

Interestingly, despite being the largest global aluminium producer, China's high domestic consumption necessitates additional metal imports.