OREANDA-NEWSIf tensions in trade relations between China and the United States increase, then prices for aluminum and nickel in 2020 may drop by 30%, experts at the rating agency ACRA write. As a result, UC Rusal, which was recently withdrawn from US sanctions, and Norilsk Nickel could lose 15–20% of pre-tax profit (EBITDA), one of the authors of the study, director of the ACRA corporate rating group, told Russian media.

The trade war between the United States and China began shortly after Donald Trump became president of the United States. In 2018, Trump imposed 25 percent duties on Chinese imports of $ 50 billion, in May of this year increased import duties totaling about $ 300 billion. In response, China has increased tariffs on American products by $ 60 billion since June. Trump has threatened to impose duties on almost all Chinese exports totaling $ 500 billion. According to the General Administration of Customs of China, amid trade disputes, trade between China and the United States decreased by 14.58% in the five months of 2019 compared to the same period last year - more than $ 35 billion.

“The crisis scenario assumes a significantly lower global consumption of metals in 2019–2020. This will lead to the formation of a surplus in the market, which will put significant pressure on prices for non-ferrous metals and weaken demand from speculators”, ACRA experts predict. The biggest fall in metal prices will occur in 2020, then they will begin to recover, as some potential capacity expansion projects will be suspended due to the crisis.

Under the baseline scenario, analysts expect aluminum prices to change insignificantly, nickel prices will fall this year by 7% by 2018, to $ 12.2 thousand per ton, against the background of increased metal production in Russia, as well as the launch of projects in Indonesia Brazil and production recovery in the Philippines. According to ACRA experts, the potential risk for the aluminum market is the possibility of introducing new sanctions against UC Rusal. Representatives of UC Rusal and one of the world's largest nickel producers, Norilsk Nickel, declined to comment.