American company Novelis, one of the world’s largest buyers of aluminum and owned by India’s Hindalco Industries, has refused to buy Russian aluminum to supply its factories in the European Union, Reuters reported.
The company stated that it would not accept Russian origin metal in the material tender announced in 2024, without explaining the reason.
The agency notes that Europe is the largest buyer of Russian aluminum. If other companies follow Novelis’ example, Russian manufacturers will have to look for new buyers.
Let us also remind you that Novelis has not signed new contracts with the Russians in 2023. One of its main partners was the company Rusal.
Commenting on the current situation, Rusal’s press service noted that this is not the first period of pressure on the Russian manufacturer. In March, the United States imposed record protective import duties of 200% on aluminum and its derivatives from Russia. On July 1, Washington also imposed increased tariffs of 35% on 570 Russian products, including various aluminum products.
Rusal’s rivals are putting serious pressure on the London Metal Exchange (LME) to block Russian aluminum trading and improve their financial situation due to the rise in prices. In July, Norway’s Norsk Hydro asked the LME to reconsider its decision not to ban the sale of Russian aluminum from its warehouses and asked whether the LME had consulted the UK Financial Conduct Authority (FCA) about the risks associated with stockpiling Russian metal in warehouses. and traded through the barter system. The company’s chief financial officer, Paul Kildemo, argued that the dominance of Russian aluminum in the exchange system is a serious problem because LME prices are the reference point for contracts between producers, consumers and traders.
Similar initiatives were made almost a year ago, in November 2022, by the American Alcoa, which called on the London Metal Exchange to delist Russian-origin aluminum grades.
Rusal’s press service notes that despite this unprecedented pressure and unfavorable market conditions, the company maintains its stable position in global export markets. The company managed to significantly increase its supply share to China and other Asian countries.
Export markets are of great importance for the sustainability of the Russian aluminum industry, as they provide employment for tens of thousands of people in the country. The production capacity of Rusal’s aluminum smelters in Russia is over 4.3 million tons, while the production capacity of the domestic market is only around 1 million tons. Thanks to the joint efforts of the Aluminum Association and the Ministry of Industry and Trade, the Russian market has grown by 37% in 10 years, but at the same time, the aluminum processing potential in the country remains largely unrealized.