AA Stock, Century Aluminum Jump On Russia Sanction Report

The European Union may consider a broad-based ban on aluminum imports from Russia, Politico reported, giving a jolt to depressed aluminum stocks including Alcoa (AA) and Century Aluminum (CENX).

The EU adopted a package of sanctions in December that barred imports of aluminum wires, tubes, pipes and foil. But that only covered 12% of EU imports, according to the industry association European Aluminium, which called for a broader ban.

Now there appears to be movement to a more full-fledged ban that the EU aims to approve in time for the second anniversary of Russia’s invasion of Ukraine in late February.

AA stock initially soared after the February 2022 invasion amid worries about a disruption of Russian exports. That’s because higher aluminum prices offset the loss of Alcoa’s revenue, after it stopped supplying Russia with bauxite, the feedstock from alumina and aluminum.

AA Stock, CENX Lead Aluminum Shares Higher

On Tuesday, AA stock jumped 6.5% and CENX rose 8%. Meanwhile, Kaiser Aluminum (KALU), which makes fabricated aluminum products, rose 1.2%.

The aluminum futures price on the London Metal Exchange rose 3.4% to $2,232.5 per metric tone.

However, aluminum prices are down by more than one-third since Russia’s invasion, while AA stock has fallen more than 70% from its March 2022 peak.

If the EU follows through and bans all aluminum imports, that would provide a bigger boost. However, it wouldn’t be like March 2022 all over again. That’s because the EU had already cut its aluminum imports by 34% from a year ago as of August. Back then, the EU faced soaring natural gas prices that had curbed aluminum output, but natural gas prices are back down to pre-crisis levels.

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