Russia's Main Body Continues To Be Affected, The Sanctions Related To Rusal, Its Exports To Europe And The United States Logistics Has Been Substantially Affected.

Historically, there has long been a gap between supply and demand in the whole European region, which is basically made up by China's aluminum exports. The rise in energy prices led to a reduction in electrolytic aluminum production in Europe. According to statistics, the monthly output was affected by 72,500 tons. In 2022, the new overseas production capacity is mainly in low-lying energy areas, and there is almost no new production capacity in Europe. Overall, the shortfall in Europe would be at least 150,000 tonnes per month, under Rusal's normal supply, without a supplement from domestic exports. If rusal's electrolytic aluminum exported to Europe is affected, the gap in the whole European region will be up to more than 200,000 tons, and the inventory in Europe can hardly adjust the difference between supply and demand. We will see that the premium in Europe will continue to rise, attracting logistics to Europe. The first thing to see is the re-export of goods in the bonded area. Secondly, in the case of low internal and external ratio (aluminum export profit is very good), aluminum export performance will be seen in the later stage. Market news has not seen signs that Rusal supply to Europe is completely cut off, but aluminum ingots to Europe due to logistics efficiency issues, the overall slow. If Rusal is subject to sanctions, there are two possibilities for goods exported to Europe: first, the overall European demand will adopt the non-DOLLAR settlement system; second, Rusal will come to China and Europe will increase aluminum procurement.

About whether the Russian aluminum itself in the sanctions due to the impact of supply chain, financial strain causes such as production, short-term temporary no such risks, the cost of aluminum in the global, and electrolytic aluminium enterprises have good profits for 2 years, the current aluminum prices temporarily won't impact on Russian aluminum enterprises cashflow, alumina aspect also temporarily do not need to worry, Internal and external price difference will lead to domestic alumina exports overseas.