Price of aluminum surged 10% amid U.S. sanctions against Russia
The price of aluminum has surged 10% since the United States slapped tough new sanctions on Rusal, a leading metal producer controlled by Russian oligarch Oleg Deripaska.
If sustained, that price hike could push up the cost of making a range of industrial and consumer products, including cars, airplanes, soda cans and pharmaceutical packaging.
Under the sanctions announced Friday, Americans are generally prohibited from doing business with Rusal, and people of other nationalities could face sanctions themselves if they facilitate transactions for the firm.
Rusal produces 7% of the world's aluminum, according to the US Treasury. But buyers, business partners and commodity exchanges are now scrambling to sever ties with the company. Its shares have plummeted 56% since the sanctions were announced.Rusal had sales of nearly $10 billion in 2017, with about 15% coming from the United States -- its second largest market after Russia.Aluminum prices can be volatile, and short term price hikes won't do much to affect the price of consumer staples. But if aluminum remains expensive, companies will eventually look to raise prices on products that use the metal.Bailey said luxury automakers like Jaguar Land Rover and BMW
would be hit hardest because their designs use more aluminum in order to make the cars lighter and more fuel efficient.
A new 10% tariff imposed by the US on some aluminum imports won't help matters.
Shares in Russia's Rusal have plunged since US sanctions were announced on Friday.
Congratulations @videotube! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Do not miss the last post from @steemitboard:
Vote for @Steemitboard as a witness to get one more award and increased upvotes!