US Sanctions on Iran a Blessing for China, India Alumina Producers
For about the last two months, alumina producers in India and China have had it good with Iran, a country under US-sponsored sanctions, with the latter having increased its purchases of alumina from these two countries.
In return, Iran has also stepped up its exports of iron ore and iron products to India and China, something which Indian steel producers at least will be happy about since ore supply remains disrupted because of a court order. Iran’s move is being read as an attempt to replace at least a small part of the country’s revenue that has been lost due to the sanctions on its oil sales.
A report by Reuters said tightened US sanctions that came into effect on July 1 that extended a ban on aluminum metal also covered raw and semi-finished metals as well. India and China, though, had won waivers from any these sanctions on their trade with Iran, but have limited their imports of Iranian oil.
Iran has a robust aluminum industry for which alumina is a much required commodity. Alumina is a refined version of the raw ore bauxite.
The report pointed out that China’s alumina exports to Iran had registered record levels in June and July, while India’s national aluminum producer had awarded an alumina tender to Iran’s national smelter in the past two months.
But the price of the material would indicate that Iran’s imports from China and India are likely to have been of lower-quality smelter-grade alumina rather than the high-purity material known as chemical grade, traders said.
NALCO and IRALCO
The Indian company National Aluminium Co Ltd (NALCO) (NALU.NS) has been awarded a sell tender to the Iran Aluminium Company (Iralco). NALCO for its part plans to raise its alumina exports by 40 percent to 1.4 million tons this fiscal year, faced with the falling value of the Indian rupee versus the US dollar. The fall in the rupee has helped NALCO raise its exports. The Reuters report revealed that China, the world’s top producer and consumer of alumina, had exported 15,072 tons to Iran in July and 15,078 tons in June. Incidentally, Iran’s Alumina Company had recently signed a memorandum of understanding with Tajikistan for exporting Alumina Company’s products like alumina and aluminum hydrate to the Central Asian country.
Source: Age Metal Miner