Latest market news

Looming Russian export tax jolts metals markets

  • : Metals
  • 21/06/25

Metals market participants are taking stock of Russia's plan to impose export duties on various ferrous and non-ferrous products exported outside the Eurasian Economic Union (EAEU), with nickel and aluminium prices jumping this morning and some ferro-alloy traders rushing to get Russian material trucked across the border before they come into effect.

Russia's ministry of industry and trade yesterday proposed duties that would come into effect from 1 August-31 December 2021 in order to protect the domestic market. The income from the duties will be used "to compensate" for rising metal prices in Russia's domestic market, the ministry said, with first deputy prime minister Andrei Belousov commenting that Russia's economy is not ready for an "avalanche-like shock transfer" of global metal prices to the domestic market.

The ministry's recommendation encompasses a range of products including steel, ferro-alloys, copper, nickel and aluminium. The base tax rate would stand at 15pc, with each product then incurring a specific duty — at least $150/t for ferro-alloys, at least $1,226/t for copper, $2,321/t for nickel and $254/t for aluminium.

For now, many market participants are watching and waiting to see if the duties come into effect and how they will impact dynamics. A couple of Russian ferro-tungsten producers appeared unfazed today, saying they are continuing to do business domestically as normal.

But elsewhere, an impact is already visible, with several companies dispatching trucks to collect Russian material — ferro-titanium and some other products — and get it across the border before any duties come into force, a trader said. With so many trucks diverted, some other metal deliveries in eastern Europe and Poland are being disrupted, with a trader in Estonia saying he had just lost out on a scheduled delivery to Germany because there are no trucks available.

A Russian ferro-titanium producer is considering reducing output if the duties go ahead because domestic prices are not high enough to make continued smelting profitable, they told Argus. Producers and traders of western grade ferro-titanium said some Russian producers have approached them to buy material to cover long-term contracts, fearing they will be unable to move enough material ahead of 1 August.

Meanwhile, the announcement has quickly jolted base metal prices, with the LME three month (3M) nickel contract rising by 2.2pc to $18,563/t in this morning's trading session and the LME 3M aluminium contract increasing by 1.9pc to $2,470/t.

The copper market has been less reactive so far, but still stands to be impacted, given Russia's role as a major exporter. Russia exported 775,848t of refined copper in 2020, around half of which went to Europe, Russian customs data show, underscoring the continent's significance as a buyer.

Europe faces higher nickel premiums

The export duty would have significant implications for nickel availability and pricing in Europe. Russia is the largest single supplier of nickel to Europe, and Europe is Russia's largest nickel export market.

Russia accounted for 180,000t, or 28pc, of all EU nickel imports in 2020, and supplied 19.4pc of the trading bloc's unwrought nickel imports. Russian material comprises the bulk of refined nickel product currently trading in the continent, a leading trader told Argus.

With most of Russia's nickel production going to the export market, suppliers are unlikely to limit overseas sales. They will need to absorb the bulk of increased costs themselves but are likely to try to restore margins by hiking prices.

Given the extent of Europe's exposure to Russian nickel, it is likely that the export duty will drive European nickel premiums higher. European nickel premiums have been suppressed by healthy supply and limited spot trading since late 2019, but any squeeze in Russian availability or increased underlying prices will lend support. Argus assessed the weekly full-plate nickel cathode in-warehouse Rotterdam premium at $40-70/t yesterday.

A major point that needs clarification is whether the new export duty will apply to all nickel products. If the tariff applies to raw nickel concentrate or other feedstock, it could disrupt Nornickel's shipments of feed from its Russian mines to its Harjavalta refinery in Finland. The site currently produces 65,000 t/yr of refined nickel products.

Aluminium premiums to adjust

There is likely to also be an impact on global aluminium premiums as Russia is a major supplier of primary aluminium to net-importing regions.

The EU sourced 9.31pc of its unwrought aluminium imports from Russia last year, national imports statistics show, although that figure has been diminished by the economic impact of Covid-19 and the attractiveness of prices in Asia, which ramped up Russian imports in the past two years.

"As Rusal is a marginal supplier to many net-importing regions/countries, global premiums will have to increase by the equivalent," an analyst said. "The US, Europe and Japan all [traditionally] take Russian metal in large quantities."

Russian imports into Europe make up a large part of the region's duty-unpaid aluminium market, as Russian metal is granted that status in the EU. Duty-unpaid premiums are therefore likely to further narrow the gap to duty-paid premiums, which nominally stands at 3pc of the LME aluminium price in line with the duties but has narrowed as the duty-unpaid market has tightened this year, partially as a result of more Russian metal making its way to Asia and other regions outside Europe.

Argus' assessment for duty-unpaid aluminium premiums in Europe stands at $205-215/t, while duty-paid premiums are at $250-260/t. At current LME aluminium prices, the duty would be just over $70/t.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/11/20

ArcelorMittal could close two service centres in France

ArcelorMittal could close two service centres in France

London, 20 November (Argus) — Europe's largest steelmaker ArcelorMittal is contemplating closing two service centres in France as part of a restructuring at its Centres de Services business in the country. The company informed staff on Tuesday that it might close its Reims and Denain sites because of a "sharp drop in activity among its industry and automotive customers", the company told Argus . Negotiations with trade unions will begin shortly, it said. Rumours about the potential closures have been circling since just before a large industry event in Hannover, Germany, in late October. Further consolidation and restructuring is expected throughout the European service centre market because of the fall in real consumption, and the difficult financial position it has caused for some processors. Most service centres have been selling processed sheet at a loss in recent months, because of weak end-consumption. German cold-roller Bilstein, that sells predominantly to the automotive industry, will reduce headcount and is contemplating closing one of its five lines, or reducing shifts across its business. There have also been market discussions about ArcelorMittal selling other automotive-facing service centres in Europe, as part of a wider reorganisation of the EU processing sector. Germany's largest steelmaker, ThyssenKrupp, has closed some of its distribution sites in its home country. Participants note the service centres are not part of ThyssenKrupp Steel Europe, which is still in talks with Daniel Kretinsky over taking a 50pc share in the business. ThyssenKrupp's ownership change could have wider ramifications for the service centre and steelmaking sector in general, with Kretinsky open to finding a strategic partner. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Graphjet launches Malaysian biomass-to-graphite plant


24/11/20
24/11/20

Graphjet launches Malaysian biomass-to-graphite plant

Singapore, 20 November (Argus) — Nasdaq-listed Graphjet Technology has started operations at its artificial graphite plant in Malaysia, which will produce battery-grade graphite using recycled palm kernel shells (PKS), the firm said on 19 November. Graphjet's facility has the capacity to produce 3,000 t/yr of graphite by recycling up to 9,000 t/yr of PKS, which is sufficient to produce batteries for 40,000 electric vehicles (EVs)/yr. The firm has already received its first shipment of PKS, it said. Graphjet has another artificial graphite production facility planned in US' Nevada, and it plans to produce hard carbon at the Malaysian facility to use as feedstock at the Nevada facility. The Nevada facility is expected to have the capacity to recycle 30,000 t/yr of PKS to produce 10,000 t/yr of battery-grade artificial graphite and is slated to begin production in 2026, said Graphjet in April. China, the dominant producer of graphite, added a number of graphite products into its export licensing scheme at the end of last year. The move back then alarmed its neighbours, Japan and South Korea , which are major battery-producing countries and they have since been looking to reduce their dependency on Chinese graphite. China's graphite flake exports fell by 23pc to 44,103t during January-September following the exports curb, according to Chinese customs data. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan, Peru sign deal to enhance copper supply chain


24/11/19
24/11/19

Japan, Peru sign deal to enhance copper supply chain

Tokyo, 19 November (Argus) — The Japanese and Peruvian governments have signed a strategic partnership to bolster the copper supply chain, with a comprehensive road map to promote bilateral business opportunities for natural resources. This agreement came as Japan accelerates efforts to secure copper supplies, while Peru is a key global copper supplier. The two countries rolled out a comprehensive road map for enhancing political and economic relationships on 17 November. This includes organising an annual bilateral meeting for mining and energy investment as well as conducting joint research on efficient mining operations, such as removal of impurities from copper ores, according to the road map. Unlike conventional initial agreements that are typically signed without a specific closing date, the Japanese-Peruvian road map has set a 10-year timeline that will end by 2033. This seems to reflect Japan's sense of urgency in securing base metal supply including copper. "Japan would like to continue to co-operate with Peru to strengthen the resilience of the supply chain of mineral resources such as copper", said Japanese prime minister Shigeru Ishiba in Peru on 17 November. Japan's current strategic energy plan that was revised in 2021 aims to lift base metal self-sufficiency to 80pc by 2030, up by around 30 percentage points from the 2018 level. But the strategy appears to not be on track, the country's ministry of trade and industry Meti reiterated in late October without disclosing the current rate. Japan appears to be especially concerned about copper supply. Meti forecasts global copper demand to double to around 50mn t in 2035 following the global electrification of applications including electric vehicles, while there will likely be a 10mn t/yr supply shortage. The country's domestic copper ingot demand is forecast to exceed 1.4mn t by 2030, according to Meti, up by 400,000 t from the 2022 level. This is partially attributed to the adoption of more artificial intelligence, it added. Japan is making efforts to diversify copper supply sources, given the deterioration in quality of copper supplied by the world's biggest producer Chile, Meti said. Peru and Argentina are prominent suppliers in the region, according to Meti, adding that Japanese government support is essential for acquiring stakes in upstream operations in those countries, given their higher risks. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Argentina pulls delegation from Baku


24/11/13
24/11/13

Cop: Argentina pulls delegation from Baku

Montevideo, 13 November (Argus) — Argentina's government today withdrew its delegation from the UN Cop 29 climate summit in Baku, Azerbaijan. The country's foreign affairs ministry confirmed to Argus that the delegation had been told to leave the event, which began on 11 November and will run through 22 November. No reason was given for the decision, but it fits the general policies of President Javier Milei, who has expressed skepticism about climate change. Milei eliminated the country's environment ministry shortly after taking office in December 2023. He is also pursuing investment to monetize oil and gas reserves, with a focus on the Vaca Muerta unconventional formation. Vaca Muerta has an estimated 308 trillion cf of natural gas and 16bn bl of oil, according to the US Energy Information Administration. In October, the government created the Argentina LNG division with a plan to involve private companies and the state-owned YPF to produce and export up to 30mn metric tonnes (t)/yr of LNG by 2030. It wants to export 1mn bl of crude. The plans are closely linked to a new investment framework, known as RIGI, that will provide incentives for large-scale investments. The administration is also pushing hard for investment in critical minerals, including copper and lithium. Argentina has the world's second-largest lithium resources, estimated at 22mn t by the US Geological Survey. It has copper potential that the RIGI would help tap. The government has not specified if pulling out of Cop 29 means Argentina will withdraw from the Paris Agreement, which Argentina ratified in 2016. The country's nationally determined contribution calls for net emissions not to exceed 359mn t of CO2 by 2030. This represents a 21pc reduction of emissions from the maximum reached in 2007. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Guterres warns of exploitation in minerals race


24/11/13
24/11/13

Cop: Guterres warns of exploitation in minerals race

London, 13 November (Argus) — Demand for critical minerals vital to the electric vehicle and renewable energy sectors should be met without causing a "stampede of greed" that exploits local communities and harms those living in poverty, UN secretary-general Antonio Guterres has said. "We are here to respond to a key challenge — turning the energy transition towards justice," Guterres told the UN Cop 29 climate summit in Baku, Azerbaijan. Guterres warned that as the energy transition accelerates, it could present more risks than opportunities for many developing countries rich in metals such as copper or lithium unless managed with justice and equity. "For developing countries rich in resources, [the energy transition] is a huge opportunity to generate prosperity, eliminate poverty and drive sustainable development. But too often this is not the case," he said. "Too often we see the mistakes of the past repeated in a stampede of greed that crushes the poor," Guterres added. "We see developing countries ground down to the bottom of value chains, as others grow wealthy on their resources." In response to concerns in developing countries rich in battery minerals, the UN in April established the Panel on Critical Energy Transition Minerals. The panel of governments, international organisations, industry and civil society developed "voluntary principles" for managing value chains for critical energy transition minerals. The panel's report outlines seven voluntary guiding principles covering environmental and human rights, responsible investment and finance, transparency and anti-corruption measures, and international co-operation. It also identifies five "actionable recommendations", including establishing an advisory group to accelerate benefit-sharing and economic diversification, developing a mineral traceability framework and creating a fund to address mine closures and other mining legacies. The UN code has no enforcement mechanisms, and so implementation depends on the participation of industry, governments and civil society. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more