19 April 2022 – Russian aluminium appears on EU sanctions list. Chinese nickel price rises w-o-w by almost 14%. Steel demand continues to rise worldwide. And steel prices in Taiwan, Japan and China continue to rise for May 2022.
EU sanctions Russian aluminium imports
On 8 April, the EU launched the fifth sanctions package against Russia due to the campaign in Ukraine. According to this sanctions package, Russian ships may only dock in European ports in exceptional cases, e.g. if they are transporting important goods or shipments are crossing the borders.
Sanctions: Flat-rolled aluminium products affected
Even if it is not immediately obvious at first glance and aluminium and some other rare raw materials are among the explicitly exempted products of Russian origin that may be imported if a special permit is obtained, flat-rolled aluminium products (sheets, plates, strips) have made it onto the European Union’s sanctions list due to their importance.
This must have sent a murmur through the ranks of aluminium importers. Until now, it had been assumed that aluminium would continue to be one of the European Union’s strategically important goods and would therefore remain exempt in the future. The EU has now rejected this assumption.
Ongoing anti-dumping monitoring procedure
In particular, with regard to the ongoing monitoring procedure concerning the anti-dumping measure against flat-rolled aluminium imports from China (AD668 and AD668Mon), the nine-month suspension of which is about to expire.
Russian aluminium imports replaceable?
Even if Russian aluminium imports are now sanctioned, the competition watchdogs of the European Commission, but also the struggling EU producers, who are battered by high energy costs, are likely to argue that Russian imports can easily be replaced by other producers or by domestic capacities. The fact that the Europeans like to successfully fall back on this argument has already been observed in other anti-dumping cases.
Chinese nickel continues its upward trend
Nickel futures on the SHFE have risen significantly since last week. Overall, prices are up w-o-w by almost 14%. Most recently, the nickel price on the SHFE was quoted at around $37650 per tonne. The reaction to the consistent rise in nickel prices could be seen at the start of trading today on the LME, where nickel started with a gain of more than 4.8%.
The Chinese spot price for nickel peaked today at around $39,200 per tonne.
Steel demand continues to grow
Demand for steel continues to hold up and is expected to grow further in 2022 and 2023. This is according to the worldsteel Association’s short-term forecast. The construction sector in particular is likely to remain a strong demand driver, as record growth of more than 3.4% was already achieved here in 2021. Also, due to the war between Russia and Ukraine, the global market is likely to be short about 100 million tonnes of crude steel this year.
Steel prices continue to rise for May 2022
Steel prices worldwide continue to rise. Not only from Taiwan are prices reported to be rising by an average of just under 3%, but also from Japan. In Japan, stainless steel prices in particular are rising by 20% in some cases.
And prices are also reported at a high level in China, with a trend towards further price increases, as stimulus programmes are expected from the Chinese government. In addition, the Volkswagen Group has started to restart its Chinese car production after the Corona-related lockdowns.
Increased production costs and strong demand are currently driving steel prices.
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