Russia to lift aluminium export tax from 2022

  • 18/11/2021
  • Spain

In August of this year, Russia introduced an export tax of 15% on aluminium products, with a minimum of USD 254 per metric tonne, for a six-month period. The measure was intended to deter exports of primary metals in order to support domestic consumers, mainly in the defence and construction sectors, and protect them from further growth in raw material costs as global prices rose. 

It was expected that the tax would remain in place through 2022, however, it will end in December of this year due to the request of domestic producers and falling domestic prices. Domestic aluminium prices were down 0.5 per cent between May and October, while world prices jumped 18 per cent.

The decision to remove the tax will increase global aluminium supplies, which has triggered a massive inventory sell-off that has led to sharp decline in prices. Aluminium has already fallen from a high of USD 3,300 per metric tonne to USD 2,700 in just over a month, and this Reuters publication cites several sources which suggest that the price of aluminium on the LME, as well as aluminium premiums, will fall even further.  

Among other factors causing the price slump is the recent increase in coal production in China, which has reduced aluminium supply concerns and made aluminium prices to hit their lowest level in more than three months last Friday. 

It remains to be seen whether we are seeing a pause in the aluminium bull run or an early turn to lower prices by 2022. 

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