Alcoa Corp. will no longer sell raw materials to Russian aluminum companies in response to the Russian invasion of Ukraine, the company said in a letter to employees.
Pittsburgh-based Alcoa also said it would stop buying materials from Russia that it uses in its foundries to produce aluminum.
Alcoa sells bauxite ore and alumina, an essential ingredient in aluminum production, to Russia’s aluminum industry. The letter did not disclose the company’s total sales to Russian customers.
At an investor conference on Tuesday, chief executive Roy Harvey described the company’s business in Russia as “relatively small and intangible” compared to overall sales.
“After careful consideration, we have decided that the time has come to act,” chief executive Roy Harvey said in the letter released Wednesday.
Russia is a major supplier of aluminum in the world. Harvey said the dispute could tighten aluminum and alumina supplies in Europe and the United States if sanctions on Russian aluminum companies or disruption to supply chains cut shipments.
Russian aluminum producer Rusal has halted alumina shipments from its refinery near the Ukrainian port of Mykolaiv, according to a report released this week by consultancy Wood Mackenzie.
The war in Ukraine gives a new impetus to the rise in aluminum prices. High demand for the metal, low inventories and rising electricity costs to produce it have driven prices up for months. The spot price on the London Metal Exchange has risen 25% since the start of the year to nearly $3,500 per metric ton.