After the Shanghai market closed, a news about the LME’s restrictions on Rusal detonated the market, and the LME aluminum price once rose by more than 8%. Against the backdrop of the months-long bearish haze, the news caused a heated discussion in the market: Bloomberg 9 The London Metal Exchange (LME) is launching a discussion paper on whether and under what circumstances to ban new supplies of Russian metals, people familiar with the matter reported on Tuesday.
In the past few years, Rusal has detonated the bullish sentiment in the market twice. One was the US Treasury sanctioned Rusal and its shareholders in 2018, and the other was the sanctions against Russia by Western countries triggered by the Russian-Ukrainian war in early 2022, which indirectly affected the Rusal's trade.
There are several reasons why the news affected emotions more intensely:
First of all, the logic of the LME market trading Rusal's centralized delivery of positions has been falling and falling. The impact on Rusal caused by the Russian-Ukrainian conflict and sanctions on Russia was that old orders were not affected, but it became difficult to sign new orders, which made it difficult to sign new orders. Rusal has accumulated a certain amount of inventory in the first half of this year. Rusal plans to deliver LME to realize sales. The data shows that the LME registered warehouse receipts have also increased slightly in the first few weeks. Rusal's delivery has suppressed LME aluminum prices, but if the ban If Rusal takes over the position or prohibits Rusal from becoming the LME delivery brand, the logic will reverse, and there will be fewer brands that can be delivered by the LME in the future, causing the LME price to rise sharply;
Secondly, from a fundamental point of view, the current aluminum price has basically fallen to the vicinity of the production cost line of RUSAL, and RUSAL is one of the lower-cost smelters in the industry. There is currently less room for aluminum prices to fall. The covering will also stimulate the price rebound;
Finally, with the recent intervention of foreign exchange by central banks of various countries, the US dollar index has peaked and declined in stages, and the macro atmosphere has eased in stages, providing a better external environment.
In April 2018, the United States sanctioned a group of Russian oligarchic businessmen, including businessman Deripaska and three companies he controlled, including Rusal, En+Group With JSC EuroSibEnergo, whether it is to cooperate with Trump to fight the trade war, sanction the global steel and aluminum industry, safeguard the interests of domestic steel and aluminum production enterprises, or to contain Russia and attack businessmen who are close to Putin, In short, there is an impact on the supply of aluminum.
After the incident, LME aluminum prices rose continuously, from a minimum of US$1,977/ton to US$2,718/ton, an increase of 37.48%, and Shanghai Aluminium rose 11.7% from 13,760 yuan/ton to a maximum of around 15,560. Later, the U.S. Treasury Department postponed sanctions. Time, and claimed that as long as Deripaska gave up control of Rusal, the sanctions on Rusal could be lifted, and then the sanctions were postponed for a while, and finally the sanctions on Rusal were officially lifted in January 2019.
After the outbreak of the Russian-Ukrainian war in February 2022, the LME aluminum price continued to rise sharply. From the previous trend of refueling in the air, it rose from around US$3,287/ton to US$4,073.5/ton, an increase of 13.75%, the highest amplitude 23.93% Shanghai aluminum rose from 22,680 yuan/ton to a maximum of 24,255 yuan/ton, with a maximum increase of 8.74%. The reason for the general performance is that the aluminum price is already at a high level, and the downstream demand has performed poorly;
At present, the LME's restriction on Rusal is only an idea and has not been implemented. However, the current global social manifest inventory is low, energy costs are high, and the bullish sentiment has been suppressed after the sharp drop in aluminum prices, so the rebound is strong. .
