Move Aims to Reduce Dependency on China and Offset Loss of Alumina Sources Post-Ukraine Invasion

In a strategic shift to diversify its supply chains and counter the impact of sanctions, Russia has significantly increased its imports of alumina feedstock from India in recent months. This move underscores Russia’s determination to reduce its reliance on China, as well as its efforts to mitigate the consequences of losing crucial alumina sources following its invasion of Ukraine.

Key Developments:

  1. Search for New Sources: Russia, home to Rusal, the world’s largest aluminium producer outside China, sought alternative alumina sources after facing disruptions to its traditional supply routes. The country lost access to Ukrainian alumina following the suspension of production at a Ukrainian refinery and encountered an Australian ban on alumina exports to Russia.
  2. Turn to India: To bridge the gap, Russia has turned to India and Kazakhstan for its alumina needs. In the first half of this year, India emerged as the second-largest supplier of alumina to Russia, exporting 189,379 metric tons—a stark contrast to the zero exports recorded during the same period in 2022.
  3. Growing Dependence: Russia’s demand for Indian alumina is expected to continue growing, with projections indicating purchases exceeding 350,000 tonnes in 2023.
  4. China’s Role: While China remains Russia’s largest third-party supplier of alumina, the Asian giant’s domestic aluminium production growth has reduced its available alumina for export, indirectly contributing to Russia’s search for alternative sources.
  5. Kazakhstan’s Adjustment: Aluminium of Kazakhstan, a significant alumina producer, has also felt the need to prioritize its own requirements. It plans to reduce alumina supplies to Russia by 5% in 2023.

Sign of Shifting Alliances:

Russia’s pursuit of diversified alumina sources not only reflects the pressure exerted by international sanctions but also signifies a shift in the nation’s economic partnerships. India, as an increasingly critical supplier of alumina, is poised to play a key role in Russia’s efforts to secure crucial raw materials.

The move underscores the evolving dynamics in the global aluminium industry, where traditional supply chains are being recalibrated in response to geopolitical challenges and economic imperatives. As Russia continues to adapt to changing circumstances, its reliance on India for alumina feedstock highlights the potential for deeper economic ties between the two nations.