Russia might restrict nickel and palladium exports to the US to counter steep aluminium import taxes

According to our sources, analysts from the metal industry have stated that Russia might restrict exports of critical metals like nickel and palladium if Washington imposes high tariffs on Russian aluminium imports.

The Russian aluminium supply accounts for only a minor share of the US supplies. However, nickel is essential for the aerospace industry and electric vehicle batteries. Conversely, Palladium is a vital component for autocatalysts in gasoline-fuelled cars.

According to Trade Data Monitor (TDM), around 11 per cent of the 92,624 tonnes of nickel imported by the US last year was imported from Russia, while Russian palladium shipments, at 20 tonnes, accounted for almost 35 per cent of US imports.

The United States is planning to increase the import tax on Russian aluminium to 200 per cent in an effort to put further pressure on Russia concerning the geopolitical crisis with Ukraine. The Russian aluminium giant, Rusal, accounts for about 6% of global supplies.

According to an analyst, "Markets should expect a response from Russia if such a tariff is imposed - possibly additional restrictions on other critical metals exported to the U.S."

According to another commodities-focused analyst, Russia will likely ban nickel and palladium shipments to the United States.

As of last year, 191,809 tonnes of unwrought aluminium and alloys were imported from Russia, or nearly 4.4 per cent of the more than 4.4 million tonnes total, up from 8.9 per cent in 2018 and 14.6 per cent in 2017.

The Australian global financial services group, Macquarie, said, "Our view is that tariffs, on a standalone basis from the US, should not have a large impact on the market as Russian volumes into the US have already dwindled."

"This would change, however, if sanctions were imposed, with potential spillover effects to other regions."