LME warehouse in South Korea receives Russian-origin aluminium from Glencore

On Tuesday, October 18, Switzerland-headquartered Anglo-Swiss multinational commodity trading and mining company Glencore shipped substantial volumes of Russian-origin aluminium to London Metal Exchange (LME) registered warehouses in Gwangyang, South Korea.

As per the sources, the aluminium shipped to Gwangyang was made by the Russian aluminium giant Rusal. Deliveries into LME warehouses show the challenge confronting Rusal, the largest aluminium producer outside of China, as 2022 contracts expire and buyers steer clear of Russian metal for 2023 contracts, according to the sources.

The price of aluminium increased by more than 7 per cent on Wednesday last week on news that the Biden administration was considering limiting imports of Russian aluminium as a possible response to Moscow's military escalation in Ukraine. Aluminium merchants said that the hasty response was brought on by concerns over shortages if Rusal was sanctioned.

Some importers and end users of aluminium in the packaging, building, and transportation sectors do not wish to employ Russian aluminium in their goods. The sources did not specify how much Russian aluminium had been sent by Glencore to the Gwangyang LME warehouses.

In April 2020, Rusal and London-listed Glencore agreed to a long-term supply of 6.9 million tonnes of aluminium. In 2020, 344,760 tonnes were supposed to be provided; between 2021 and 2024, around 1.6 million tonnes annually. On Friday, the amount of aluminium in LME warehouses increased by 65,825 tonnes to 433,025 tonnes. Of those, 44,675 tonnes went to Port Klang in Malaysia, and 23,525 tonnes went to Gwanyang in South Korea.