Could Russia's aluminum export tax be coming to an end next month? - MetalMiner

When news of Russia’s export tax on primary aluminum came out in the summer, it caused an increase in LME prices. More significantly, however, physical delivery premiums — such as the Midwest premium, the Rotterdam premium and the Main Japanese Port (MJP) premium — also increased.

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Aluminum premiums surge

Of the three, the Rotterdam premium arguably had the biggest impact. Some European rolling and extrusion mills beginning to quote the Rotterdam premium – either duty paid or duty unpaid – as a separate component of their pricing structure.

That has long been a feature in the U.S. market, where the Midwest premium has been a sizeable component of the all-in price. However, it had never been a cost broken out for European consumers, with the mills absorbing the Rotterdam premium as part of their conversion premiums.

Russian aluminum export tax

Russia set its export tax at 15% or U.S. $254 per metric ton, whichever is larger, back in August for an initial six-month period. The move ostensibly aimed to dissuade primary metal exports in an effort to support domestic consumers facing rapidly rising costs in a domestic manufacturing sector that was running hot as it bounced back from pandemic restrictions.

The expectation was the tax would likely remain in place well into 2022, as it would provide a welcome revenue stream for the Russian treasury....

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