15 Apr 2024 13:23

Rusal: new U.S., U.K. sanctions have no impact on company's deliveries, do not extend to logistics or payments

MOSCOW. April 15 (Interfax) - New U.S. and U.K. sanctions do not affect Rusal's ability to deliver products as they do not extend to the company's global logistics solutions, access to the banking system and production system, Rusal said on Monday.

"Rusal will retain the ability to provide hedging services to its customers and remains committed to market-based pricing," the aluminum company said in a statement.

Furthermore, the U.S. Treasury Department's decision does not impose any new prohibitions or requirements regarding the processing, clearing or sending of payments by any intermediary banks, the company said.

Rusal also notes that the new sanctions do not exclude any of the company's brands from LME (London Metals Exchange) listings. What is included is suspension of deliveries to LME warehouses and a ban on the issuance of warrants on the global metal exchange in respect of Russian-origin aluminum produced on or after April 13, 2024.

These measures appear to relate solely to the exchange and derivatives, Rusal believes.

The LME acknowledges in the April 13 notice that a significant portion of the market remains willing to take delivery of Russian aluminum, the company noted. Rusal also sees strong demand for Russian metal, including low-carbon aluminum and new alloys, from a variety of end users around the world, the company itself said.

On April 12, the US and the UK imposed a ban on imports of aluminum, copper and nickel from Russia. As a result of this initiative, the LME and Chicago Mercantile Exchange (CME) are prohibited from accepting new shipments of aluminum, copper and nickel from Russia. The sanctions also prohibit the issuance of warrants for Russian metals and the purchase of metals in settlement of derivative contracts. Russian products produced after April 13 cannot be traded on the world's key exchange, where the benchmark for base metals is determined, and cannot enter its warehouses. Russian metal produced before April 13 can still be accepted if its seller can provide evidence regarding its production date, the LME explained.

According to consultancy CRU Group, Russia supplies about 6% of the world's aluminum. Aluminum accounts for 83% of Rusal's revenue. In March, the share of Russian aluminum in LME warehouses reached 91%. As of today, 400,000 tonnes of Russian metals out of the total volume of 1 million tonnes are in LME warehouses. Aluminum accounts for the bulk of the inventory (311,000 tonnes).