Alcoa Corp. will no longer sell raw materials to Russian aluminum businesses in response to Russia’s invasion of Ukraine, the company said in a letter to employees.
Pittsburgh-based Alcoa also said it will stop purchasing materials from Russia that it uses in its smelters to produce aluminum.
Alcoa sells bauxite ore and alumina—a crucial ingredient for making aluminum—to Russia’s aluminum industry. The letter didn’t disclose the company’s sales total to Russian customers.
Chief Executive Roy Harvey during an investor conference on Tuesday described the company’s business in Russia as “relatively small and immaterial” to overall sales.
“After close consideration, we’ve decided now is the time to act,” Chief Executive Roy Harvey said in the letter, which was issued Wednesday.
Russia is a major supplier of aluminum globally. Mr. Harvey said the conflict could tighten supplies of aluminum and alumina in Europe and the U.S. if sanctions against Russian aluminum companies, or disrupted supply chains, reduce shipments.
Russian aluminum producer Rusal has stopped alumina shipments from its refinery near the Ukrainian port of Mykolayiv, according to a report this week from consulting firm Wood Mackenzie.
The war in Ukraine is providing additional momentum for higher aluminum prices. Elevated demand for the metal, low inventories and rising costs for electricity to produce it have been boosting prices for months. The cash price on the London Metal Exchange is up 25% since the start of the year to nearly $3,500 a metric ton.
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