LME aluminium prices rose to over US$2,630/t on Wednesday, 15 January, following the European Commission’s proposal of bans on Russian primary aluminium in its 16th package of sanctions, effective February 2025.

The EU has proposed the implementation of another ban on certain aluminium products, including wire, tubes, pipes, and foil, which represent less than 15% of the EU’s total imports when combined. Since the initial sanctions targeting Russia and the restrictions on aluminium imports were introduced in February 2022, following Russia’s invasion of Ukraine, Russian aluminium imports into the EU have dropped significantly, falling from 5.5Mt in 2022 to 2.4Mt in 2024. The significant reduction underscores the impact of EU trade measures aimed at reducing Russian aluminium reliance amid geopolitical tensions. This potential ban is expected to further limit the availability of Russian-sourced aluminium products on the market, creating opportunities for alternative sources to fill the gap

LME aluminium prices experienced fluctuations in response to the imposition of sanctions on Russia in 2022, but there has generally been a trend of decline. A peak price of US$3,538/t was recorded in March 2022, while prices closed at US$2,538/t in December 2024. The proposed ban on Russian aluminium will likely exert upward pressure on prices in the short term, as the market will require some time to adjust to these changes.

Since the onset of sanctions in 2022, China has increasingly absorbed more of Russia’s aluminium exports. This surge in demand for Russian aluminium indicates that China might be nearing a tipping point due to constraints in its production capacity. As the availability of aluminium from these two major producers continues to dwindle, supply constraints are likely to intensify, further driving aluminium prices upwards as the market responds to the tightening availability.