SHANGHAI, Nov 5 (SMM)—The news of Russia's cancellation of aluminium export tariffs caused shocks in the aluminium market yesterday. SHFE aluminium fell more than 7% as of 11:05.
This decision to abolish aluminium export tariffs applies to Rusal. Rusal is the second largest aluminium supplier, accounting for 6% of global aluminium supply last year. Russia imposed a 15% export tariff (or at least $254/mt) on primary aluminium exports from August to December.
As early as October 18, Russia’s Interfax News Agency reported that the Press Service of the Ministry of Economic Development of Russia stated that the subcommittee on Tariff and Non-tariff Supervision supports the reduction of the export tariff rate for aluminium alloys to zero.
Russia will cancel aluminium export tariffs, which will increase global supply and directly push down premiums of Yangshan aluminium and overseas spot prices. The most-traded SHFE aluminium fell 5.39% while LME aluminium declined 4.93% overnight.
The total inventory of aluminium ingots and rods this week is 1.15 million mt, flat from last week. The actual inventory accumulation trend is coming to an end. If the total inventory of aluminium ingots and rods declines in the next week, aluminium prices are likely to rebound from low levels.
