Russia Considers Lifting Its Aluminum Export Tax

Russia set its export tax at 15% or U.S. $254 per metric ton, whichever is larger, back in August for an initial six-month period. The move ostensibly aimed to dissuade primary metal exports in an effort to support domestic consumers facing rapidly rising costs in a domestic manufacturing sector that was running hot as it bounced back from pandemic restrictions.

The expectation was the tax would likely remain in place well into 2022, as it would provide a welcome revenue stream for the Russian treasury. However, maybe bolstered by bumper oil revenues or faced with strong lobbying by Rusal, a recent Reuters report suggests the probability is the tax will be allowed to end in December. As a result, metal supplies to Europe could increase.

Aluminum has already fallen from a high of $3,300 per metric ton to $2,700 in just over a month. The Fast Markets Duty unpaid Rotterdam premium has dropped 20% from $380 per ton in September to $302 today.