Russian Federation aluminium giant UC Rusal is mulling increasing its presence in the People’s Republic of China’s low-carbon aluminium market, drawn by increased demand for it in the electric vehicles sector and a friendlier business climate.
On Friday, Huang Wenqian, vice president at Rusal Shanghai Economic and Trade Company Limited, was confident that Rusal would do well in the Middle Kingdom.
“We are very optimistic about China’s low-carbon demand.”
Huang went on to say that Rusal sells its low-carbon aluminium for between US$20 and US$40 over spot on the Shanghai exchange per metric ton in China, in contrast to up to US$60 per metric ton over spot price on the London Metal Exchange.
Although demand for low-carbon aluminium is not quite as strong in China as it is in Europe, EV makers in China are positioning themselves to reduce their carbon footprint ahead of likely pressure from foreign consumers. For instance, China’s Nio is planning to purchase primary aluminium with a carbon footprint of no more than 7 metric tons per metric ton of aluminium.
As a result, many global aluminium smelters are responding by dropping their emissions as well. Production of low-carbon aluminium is expected to rise by 10 percent next year, which is expected to lower the cost of low-carbon raw materials for automakers.
Nearly the entirety of its 4 million metric tons per annum of aluminium production was of the low-carbon variety, emitting less than 4 metric tons of carbon per metric ton of smelted primary aluminium.
Currently, Rusal sells between 400 thousand and half a million metric tons of primary aluminium each year to Chinese buyers. Currently China imports 1.58 million metric tons of primary aluminium each year.