Russian exports of aluminum in April plummeted 35% year over year to 172,000 tonnes, from 266,000 tonnes in 2017, as sanctions continued to impact Russia's main aluminum exporter, United Co. Rusal PLC.
On June 6, the Russian Federal Customs Service published export figures for April for key goods, noting that exports of aluminum generated US$325.9 million.
In addition, the Customs Service released the export figures for the first four months of the year, amounting to 1 million tonnes of aluminum, down year over year from 1.1 million tonnes.
The decline in exports comes after the U.S. Treasury put sanctions on Rusal, prompting a crash in share prices and sending the aluminum price to record highs.
The U.S. government included the company on an April 6 list of entities and individuals that have allegedly profited from the Russian government's "malign activity around the globe."
Under the sanctions, companies and individuals are banned from facilitating transactions with Rusal and may be penalized for doing so.
"The decline is huge," said Maxim Khudalov, director of the corporate ratings group at ACRA.
He added, however, that export volumes in May would likely spike to between 210,000 and 230,000 tonnes, after the Office of Foreign Assets Control extended the deadline for companies to cease dealings with the Russian company to Oct. 23 from June 5.
"I think traders and final customers would try to purchase as much metal as possible to build stocks in order to secure metal shipments after supplies from Rusal become prohibited," Khudalov said.
Following the implementations of the sanctions, Khudalov had told S&P Global Market Intelligence that cutting off Russian exports of the metal to the U.S. would result in an annual shortfall of 700,000 tonnes.
Data from state-owned Russian Railways obtained by Interfax shows that the aluminum giant shipped 197,000 tonnes of aluminum abroad in May, while shipments to the domestic market fell 11% to 49,000 tonnes.
One of the key conditions set out by Washington for the relief of sanctions was that Russian billionaire Oleg Deripaska relinquish his control of the aluminum giant. The Russian tycoon holds a 48.13% stake in Rusal through power company En+ Group PLC, which he controls.
Deripaska has since taken steps to appease the U.S., stepping down as nonexecutive director of Rusal and director at EN+.
