To cut reliance on China, Russia turns to India for aluminium feedstock
LONDON : Russia has stepped up imports of the aluminium feedstock alumina from India in recent months to supply its vast Siberian plants, a move that diversifies the sanctions-hit country's supply, helps reduce dependence on China and cuts costs. After invading Ukraine, the world's second biggest producer of aluminium lost two crucial sources of alumina, used to make aluminium metal, as a refinery in Ukraine suspended production and Australia banned supplies to Russia. While Russia and China are on friendly terms, aluminium production in China is rising, leaving less price flexibility for Russia to buy alumina.
Russia's Rusal, the world's largest aluminium producer outside China, needs to fill the gap left by suspended supplies to sustain domestic production while aiming to protect its margins against a weaker aluminium price backdrop. The company's own alumina assets in Russia, Ireland, Jamaica and Guinea supply 70% of its needs, or 5.5 million metric tons. "After deliveries from Ukraine and Australia were lost, Rusal replaced it with increased alumina imports from China and other refineries in Asia, but it came at a considerable cost," Ami Shivkar at WoodMac said.
Russia became the largest buyer of alumina from China last year. Rusal's cost of purchasing alumina jumped by $1.1 billion to $1.8 billion in 2022 as it had to pay more for the raw material and for delivery. Rusal has since diversified by securing alumina supplies from India and Kazakhstan.
Read more on livemint.com
