Sources claiming knowledge of the situation say Glencore plc will buy aluminium for embattled Russian aluminium firm UC Rusal according to comments published in a wire service.
Reuters reported on Thursday that two individuals with direct knowledge of the situation informed them of Glencore’s decision. Those sources also indicated that only about a tenth of Rusal’s book of business is searching for alternative aluminium sources.
One source who spoke to Reuters was adamant.
“Glencore are going to take aluminium from Rusal next year.”
The source went on to say that talks for the remainder of Rusal’s output continue. The source did not give a quantity of aluminium that Glencore will purchase from Rusal next year.
Speculation has run rife over the amount of business Rusal could expect next year, as calls to ban Russian aluminium import and sales began shortly after the Russian government’s invasion of Ukraine in February. The London Metal Exchange (LME) has openly considered banning Rusal’s aluminium, while both Alcoa and Norsk Hydro have publicly called for a boycott.
However, business groups in Europe have urged caution in enacting such bans, as they warn that embargoes on Russian aluminium would harm downstream industries more than they would hurt Rusal.
Ultimately, Rusal’s precarious position has been made that much more difficult due to other uncertainties facing the market in 2023, according to a second source.
“Talks have taken longer than usual because there is so much uncertainty about aluminium demand next year.”
The source continued by saying Rusal has sold about three-fourths of its production next year, which will be in the neighborhood of 4.2 million metric tons. The source also noted that the LME’s debate over whether to ban Russian aluminium from its warehouses is also exacerbating the situation.
Neither Glencore nor Rusal opted to comment to Reuters. Glencore owns 10.5 percent of En+ Group, which is Rusal’s majority stakeholder.