Two weeks after the UN Security Council lifted economic sanctions on Iran, a number of alumina market participants have said they remain cautious about trading with the Middle Eastern state, due to uncertainties about other international trade control regimes that may still be in force.
"[Our] company position on this is that it is too early to say regarding Iran, but like any producer we are continually evaluating market opportunities," South32 spokesman Jill Thomas said.
A number of trader sources said they were awaiting legal counsel and/or guidance from compliance specialists, before trading alumina with Iran.
A trader estimated it may be another three months before establishing whether it is safe to proceed. "There are still a lot of details [to consider]. We can't go direct that soon."
A second trader said Iran "remains a murky area."
Brian Doy, a spokesman for Alcoa of Australia, said he couldn't speculate on Iran.
Alcoa's head office in the US, and Rio Tinto and Rio Tinto Alcan officials in Australia, didn't respond to calls for comment. AUSTRALIA FREES ALUMINA EXPORTS TO IRAN
On Tuesday, Lauren Tuohy, an official with Australia's Department of Foreign Affairs and Trade, affirmed that Australian bauxite and alumina are no longer controlled for export to Iran.
However, the Australian government continues to restrict the export of certain semi-finished aluminum and aluminum alloy products to Iran, she said. Australia embargoed all trade with Iran from October 2008 until January 2016.
However, Foreign Affairs Minister Julie Bishop said in a January 17 statement that Australia would continue to enforce sanctions on military exports for five years, and maintain restrictions on ballistic missile-related material for another eight.
Market participants said renewing trade with Iran is a complex matter as there are different levels of sanctions to navigate across countries and corporations.
"The Australian government is one part, but every company has a different position," a third trader said. He cited examples in earlier years when major producers and traders had adhered to varied policies on trading with Iran.
Additionally, sources also said different policies may apply to US companies based in the US, US affiliates based offshore, and international firms listed on US bourses.
Iran is short of alumina, supplementing local production with imports.
In the short term, Iran's return to the alumina open market will not radically change the global supply-demand balance, sources said.
For one, Iran will no longer have to pay substantial premiums for Indian alumina, and there will be changes in international trade flows, as Iran gains access to shipments from Australia, Europe, Vietnam and possibly the Americas.
While the overnight impact is likely to be small, deeper changes are likely to take shape in the longer term, sources said.
Iran's new revenue from oil exports is expected to pave the way for general development in the country.
This in turn will fuel local demand for aluminum, and potential investments in new aluminum smelting capacity, and by extension, increased demand for alumina, market sources said.
