Report: RUSAL discusses deals in China to ease sanctions crunch
MOSCOW, Apr 19 (PRIME) -- RUSAL has met with Chinese companies and traders this week to discuss purchases of alumina and sales of aluminum as the U.S. sanctions freezed out the Russian producer from markets around the world, Bloomberg reported Thursday, citing people with knowledge of the talks.
RUSAL is looking for alternative sources of alumina, the raw material for aluminum, as sanctions block its normal supplies, according to the people, who asked not to be identified because the matter is private. At the same time, the Russian company is asking traders whether it can boost sales of the refined metal in ingot form in China, as its usual customers are cut off.
RUSALТs delegation in China, which includes senior marketing and sales representatives, is discussing potential options, hasnТt reached any sort of agreement and may not do so, according to the people. The Chinese officials were cautious about any sort of deal because of the risk of contravening sanctions, the people said. RUSALТs press office declined to comment.
The U.S. sanctions are upending the global supply chain for aluminum, which is used in planes made by Boeing and Ford Motor trucks. RUSAL is the worldТs biggest producer outside China, supplying about 6% of the worldТs aluminum. It operates mines, smelters and refineries across the world from Ireland to Jamaica.
RUSAL is likely to target sales in alternative markets across the Middle East, Turkey and China to make up for lost exports to western markets, Morgan Stanley analyst Susan Bates said in an emailed note. China is the worldТs biggest producer of aluminum and has been exporting increasing volumes of aluminum products that it doesnТt require domestically.
The metal surged to the highest level since 2011 on Thursday amid the global scramble for alternative supplies, trading at U.S. $2,616 a tonne at 1:52 p.m. in Singapore. Goldman Sachs Group forecasts prices could surge to $3,000 a tonne in the near term as the impact overwhelms the market.
RUSALТs Hong-Kong traded shares have lost more than 60 percent since the sanctions were announced. They rallied by as much as 15% on Thursday to Hong Kong $1.64.