The European Union is considering a phased ban on Russian aluminium imports as part of its latest sanctions package, aimed at marking the third anniversary of Russia's invasion of Ukraine. The proposal includes an initial import quota for a year before a full ban comes into effect. While the EU continues to import Russian aluminium, volumes have steadily declined over the past two years as European buyers have self-imposed restrictions.
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According to UN Comtrade data, the EU imported over 320,000 tons of unwrought aluminium from Russia in the first 11 months of 2024, accounting for around 6% of total imports. However, Russia has increasingly shifted its aluminium sales to Asian markets, particularly China. If approved, the EU's sanctions are expected to push aluminium prices higher on the London Metal Exchange (LME). However, the proposal requires unanimous support from all EU member states and could still be revised before formal adoption.
Meanwhile, trade tensions continue to unsettle global metals markets. Copper prices dropped below $8,000 per ton following tariff threats from U.S. President Donald Trump. On Monday, Trump announced plans to impose tariffs on copper, aluminium, and steel, among other goods, as part of his strategy to bolster domestic production. He further stated that he seeks tariffs "much bigger" than 2.5%, rejecting speculation that his incoming Treasury Secretary, Scott Bessent, would favour a lower rate.
The metals market remains on edge as tariffs pose a significant threat to global trade and economic growth. According to the U.S. Geological Survey, the U.S. relies on imports for 13% of its iron and steel, 44% of its aluminium, and 46% of its copper. A prolonged trade conflict could slow global growth, disrupt supply chains, and dampen demand for metals.
Speculative activity in the metals market has intensified in recent weeks. The latest LME Commitment of Traders (COTR) report reveals that investors have increased their net long positions in aluminium for the second consecutive week, reaching 117,876 lots, the highest since mid-November 2024. Copper has also seen a surge in bullish bets, rising for the fourth straight week to 67,624 lots, the highest level since November. Conversely, money managers have trimmed their net long positions in zinc.
As geopolitical and trade uncertainties mount, the metals industry is bracing for heightened volatility in the months ahead. The EU's proposed aluminium ban, coupled with potential U.S. tariffs, could reshape global supply chains and drive significant market shifts. Industry participants will be closely watching developments as policy-makers finalise their decisions.
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