Reuters reported that aluminium users around the world will pay less for their material after the United States lifted sanctions on major producer Rusal, but US tariffs on imports of the metal mean limited gains for the country’s consumers. The US Treasury on Sunday lifted sanctions on the core empire of Russian tycoon Oleg Deripaska, including aluminium giant Rusal and its parent En+, despite a Democrat-led push to maintain them.

That pushed aluminium prices on the London Metal Exchange down 2 percent on Monday to near USD 1,880 a tonne.

Prices of the metal used widely in transport and packaging have dropped 30 percent since hitting a seven-year high of USD 2,718 a tonne in April, after the imposition of sanctions.

Julius Baer analyst Carsten Menke said that „Since the first time the deadline was extended, the market started to price in the idea that sanctions would be lifted eventually.”

The United States extended several times its deadline for US consumers to wind down business with Rusal.

Menke said that „US tariffs on aluminium imports mean US manufacturers will pay more than consumers in Europe But from a global supply perspective, US tariffs don’t matter so long as the motivation to ship exists.“

Tariffs mean producers need a strong incentive to sell to US consumers and this can be seen in the physical market premiums that are paid above LME aluminium prices.

The premium for shipping to the United States stands at around USD 0.19 a lb or USD 420 a tonne, double the USD 200 a tonne seen at the start of 2018 and about 20 percent above the levels at the time tariffs were announced in early March 2018.