Rio Tinto Plc executives have warned that the unfettered flow of Russian aluminum into the U.S. is making North American producers less competitive.
Jakob Stausholm, the chief executive, said in an interview at Bloomberg's New York headquarters that while Allies like Australia continue to face restrictions beholden to the Trump administration, Russian imports remain free of American sanctions and are flowing into the country unchecked. His comments are his most candid on the aluminium industry since taking the helm at Rio in early 2021.
The warning from the head of one of the world's largest aluminium producers came as US trade data showed Russia was the third-largest exporter of the metal to the US in August. Monthly imports from Russia rose nearly 60% last month from April levels, despite global buyers rejecting Russian metals because of the invasion of Ukraine.
Aluminum prices have fallen more than 20 percent this year as global demand has been hit by inflation, supply chain problems and surging energy prices in Europe. Regional aluminum shipping prices in the United States are near their lowest level since December, suggesting that demand for appliances that make window frames and cars is shrinking in the face of uncertain economic headwinds in the world's largest economy.
"It's hard to have a profitable aluminum industry in North America right now because Russian aluminum is coming in," Stausholm said. "Right now we have the lowest aluminum prices of the year, and you would expect the Russia-Ukraine crisis to lead to higher aluminum prices."
The Biden administration has held off on sanctions on Russian aluminum imports out of concern that the move would stifle American consumers, one of its most important suppliers. Russia is the world's second-largest producer of the metal, and has traditionally supplied about 10 percent of U.S. imports of aluminum.
Rio Tinto is the largest aluminium producer in North America, with its main assets in Canada. Half of the aluminum consumed in the United States comes from Canada.
Asked what discussions the company has had with the U.S. government on the subject, Stausholm said he is working to ensure policy toward Russia is transparent to lawmakers. Producers in the United States and Europe continue to close smelter capacity that became unprofitable in the wake of the energy crisis and slowing global growth.
Russian producer United Co Rusal International PJSC took a hit as big consumers refused to keep buying its metal, but that didn't stop some North American buyers from continuing to import from the company.
"It looks strange," Ms. Staustholm said.
