The call for a Russian aluminum ban to make a comeback - European industry associations hope that the London Metal Exchange can "withstand pressure."

On Friday (July 28), five European industry associations issued a joint statement urging the London Metal Exchange (LME) not to heed the call for a ban on Russian aluminum, as such action would harm smaller metal consumers in Europe.

Last week, Norsk Hydro urged the LME to reconsider its decision not to ban Russian aluminum from entering its warehousing network, as the influx of supply was endangering the benchmark status of its contracts. In response, Rusal stated that Norsk Hydro was disrupting market stability for its own benefit.

However, Norsk Hydro's appeal did not receive support in Europe. The latest news shows that five organizations, namely the Federation of Aluminium Consumers in Europe (FACE), the Federation of German Industries for Economic Development and Foreign Trade (BWA), the Italian Foundry Suppliers' Association (AMAFOND), the Italian Association for Scrap, Raw Materials and Steel Products Distribution (ASSOFERMET), and the Italian Foundry Association (ASSOFOND), jointly expressed that any restrictions on Russian sources would have a "devastating" impact on the aluminum industry value chain in the European Union.

Mario Conserva, Secretary-General of FACE, wrote in the letter, "These calls for bans and sanctions seem to be yet another attempt by oligopolies to easily eliminate competitors through non-market actions and turn Europe into a market solely controlled by them."

Russia is a major exporter of metals such as aluminum, steel, and titanium, accounting for approximately 6% of global aluminum production. In November of last year, following market consultation, the LME decided not to ban the delivery of new Russian metal. Subsequently, the proportion of aluminum from Russia in LME inventories notably increased.

In October of last year, Russian aluminum accounted for less than 18% of LME-registered warehouse aluminum stocks. By January of this year, it rose to 41%, then to 68% in May, and reached 80% in June. Norsk Hydro believes that such a supply proportion is jeopardizing the benchmark status of LME contracts.

Earlier this month, the European Aluminium Association stated that it is also considering lobbying the European Union for sanctions on Russian aluminum, but not specifically targeting Russian aluminum companies.