U.S. aluminum companies said they supported the Biden administration’s move to impose steep tariffs on imported Russian aluminum, as analysts and executives predicted the new duties would have a minor effect on domestic aluminum costs.
The White House on Friday imposed 200% tariffs on imported aluminum from Russia, as well as aluminum imports from elsewhere that include Russian aluminum, as part of a package of duties on Russian metals, minerals and chemicals worth about $2.8 billion. The tariff package coincided with the one-year anniversary of Russia’s invasion of Ukraine.
Russia is one of the world’s largest producers of primary aluminum, with large reserves of bauxite and low-cost hydroelectric power to operate aluminum smelters.
The Aluminum Association, a trade group that represents U.S. producers and users of aluminum, said it “stands united in support of any and all efforts deemed necessary by the U.S. government to address the ongoing crisis.” The group had opposed the Trump administration’s 2018 tariffs on imported aluminum.
“This is a global security and humanitarian disaster,” said the Arlington, Va.-based trade group.
Century Aluminum Co.
predicted that the new tariffs would strengthen the U.S. supply chain and make the country less reliant on unfriendly countries.
Century idled its Hawesville, Ky., smelter last year because of soaring costs for electricity, which the company attributed to rising global energy prices caused by the war in Ukraine. Century said its power costs for Hawesville tripled after the war started.
“A thriving domestic aluminum market is essential to today’s U.S. national security,” Century said.
said the tariffs are a good first step, but called for sanctions against Russian aluminum that would effectively make it illegal to buy or sell Russian aluminum in the U.S.
In 2018, sanctions by the U.S. Treasury Department against the aluminum producer
PLC in retaliation for the Russian government’s actions in Syria, Ukraine and elsewhere touched off a sudden surge in aluminum prices because of supply concerns.
The sanctions were eventually rolled back, and aluminum users in the U.S. have steadily reduced their reliance on imported Russian aluminum in recent years. The Aluminum Association said the import volume of Russian aluminum has fallen by about 70% since 2017 and now accounts for about 3% of the aluminum imported annually by the U.S.
Analysts and company executives said they don’t expect a repeat of the 2018 price surge when the new 200% duty on Russian aluminum takes effect on March 10. They said the Biden administration has been telegraphing the move for months, giving the aluminum industry time to adjust to the duty. Imported aluminum from Russia already carries a 10% tariff put in place by the Trump administration in 2018.
“U.S. market participants weren’t surprised by the announcement,” said Christopher Davis, regional pricing director for Americas metals at S&P Global Commodity Insights. “They said the increased tariffs were unlikely to have a significant impact on U.S. pricing.”
Tariffs on imported aluminum are typically reflected in the delivery premium, which is added to the base price of aluminum for the cost of warehousing, transportation and other expenses. The U.S. benchmark delivery premium is currently 29.3 cents for a pound of aluminum, down slightly from a month ago, according to S&P.
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