Russian Aluminum’s Significant Shift Towards China
Russian aluminum magnate, Rusal’s strategic acquisition of a 30% share in Chinese alumina producer Hebei Wenfeng New Materials (HWNM) has set a new direction in the global aluminum landscape. This move is expected to counterbalance the alumina previously imported from Ukrainian refineries and Australia, hinting at a new blueprint for the Russian aluminum market.
This partnership not only enhances Rusal’s reliance on China for aluminum products stemming from bauxite but also positions China as a prime market for Rusal’s end products. This shift is particularly notable since Western markets have diminished their intake of Russian aluminum.
Trade Dynamics Reflect Market Evolution
This change in trade alliances symbolizes the larger transformation occurring within the aluminum industry, with the China-Rusal deal epitomizing this trend.Rusal confronted a loss of 2.5 million tons of alumina access in 2022, registering a 28.3% drop in alumina production, settling at 5.953 million tons. By the first half of 2023, this decline stood at 24%. To bridge this gap, Rusal turned to third-party sources, predominantly in China.
In a stark contrast from 2021, where China exported a mere 117,000 tons of alumina to Russia (only 1,750 tons), 2022 saw this number spike to over a million tons, with 843,000 tons directed to Russia. By September 2023, alumina exports to Russia climbed 22%, reaching 805,000 tons, making up a significant 86% of China’s total alumina exports.
Rusal’s partnership with HWNM not only offers stability to the enterprise by minimizing its spot market reliance but the 30% stake acquisition also facilitates Rusal’s utilization of processed products, approximating 4.8 million tons annually.
