Bauxite and alumina: With sanctions lifted, Rusal is upbeat

Rusal, Russia’s largest and the world’s second-largest aluminium producer, reports that its business is back to normal now that US sanctions have been lifted and has repeated its positive forecasts for the aluminium market. The company says sales are gradually returning to the levels seen before the US Treasury imposed sanctions on it and other businesses linked to Russian tycoon Oleg Deripaska.

The US Office of Foreign Assets Control imposed sanctions on Rusal on April 6, 2018 and removed the sanctions nearly 10 months later on January 27 this year.

Rusal’s overall 2018 revenues were still up 3.1% to US$10.28 Bn, compared to the previous year’s US$9.97 Bn.

Roskill view:

The sanctions against Rusal caused anxiety in the overall alumina market, but the company’s involvement with supply to non-metallurgical (non-met) applications outside of Russia is limited.

Several other issues have also influenced non-met markets, however, in what has been an eventful year. As well as the Rusal sanctions, a production embargo at Hydro’s Alunorte has reduced alumina supply by more than 2Mt causing a supply deficit in the world ex-China and resulting in significantly higher alumina prices.

The largest market for non-met bauxite and alumina continues to be refractories but the industry continues to diversify into speciality aluminas for high-value markets.

In alumina trihydrate applications, flame retardants, water treatment chemicals and aluminium fluoride are all expected to boost demand in 2019, keeping prices firm. Aluminium fluoride markets are covered in both Roskill’s non-met bauxite and alumina report, and Roskill’s fluorspar report.

Roskill will be giving a presentation on non-met bauxite applications and markets at the Fastmarkets IM 25th Bauxite & Alumina Conference in Miami, 25–27 March 2019, ahead of a panel discussion on how a turbulent year has affected the non-met market.

To discuss the non-met bauxite and alumina market with Roskill, contact Ted Dickson: ted@roskill.com or Kerry Satterthwaite: kerry@roskill.com