- Daniel Gouvion
How the Russia/Ukraine conflict is skyrocketing the price of aluminum to new all-time highs.
On the morning of February 24th President Vladimir Putin ordered an invasion in two separatist-held regions within Ukraine, Donetsk and Luhansk oblasts.
This attack comes as the international community has exerted condemnation if such acts take place.
With all the chaos currently happening in eastern Europe over this event many were speculating how NATO (North Atlantic Treaty Organization) members would react to the news.
On February 24th the United States and supporting NATO countries imposed sanctions on Russia for their acts of aggression in Ukraine.
To many this overseas invasion might not seem relevant to the glazing and storefront industry, but in fact, this conflict has crucial implications on the price of aluminum
Just 4 months ago in September of 2021, Aluminum rose to its highest level in over a decade reaching $3,000/ton.
Many glazing business owners saw the price of their aluminum storefront products go up but didn’t know exactly why it happened.
So how does the Russia and Ukraine conflict tie into the price of aluminum going up?
According to Anna Webber, who writes for foreign policy, explains in her article “Why Is Aluminum So Expensive Right Now?” that the country of Guinea, just experienced a military coup that ousted their country's president and installed a new government
This news wouldn't mean much if it wasn't for the fact that Guinea is one of the world's largest producers of a mineral called Bauxite, which is a key ingredient used in aluminum.
Not only is Guinea a key producer of Bauxite but, they also hold the world's largest reserves of the mineral.
K. Riva Levisom, who writes for The Hill, in her article titled “America's interests in stopping Russian destabilization must extend to Africa” stated that following the military coup, Russia immediately sent a diplomat to Guinea in good faith to talk to the new government which could indicate a strong relationship between both countries.
Furthermore, back in 2010 a Russian manufacturing company named RUSAL received the mining rights to vast reserves and mines that relate to the mineral Bauxite in Guinea. This means that Moscow has a firm grip on aluminum prices on the international market
The last Sanctions placed on Russia were in 2018 and were directly placed on RUSAL by the United States treasury department but were lifted shortly after in early 2019
With the United States now imposing sanctions on Russia for the conflict in Ukraine it's very important to keep an eye on if President Biden will once again impose sanctions on the Russian mining company RUSAL which would in turn cause aluminum prices to go up.
Co Author: Issak Flores at Artisan Glass & Design