Novelis’s top brass said it would continue to honor its contracts in place with Russian aluminium giant UC Rusal, but the company would enter into no new deals once those contracts expire.
Novelis’s CEO Steve Fisher spoke to Reuters this week on the subject, and he indicated that the beginning of Russia’s invasion of Ukraine last year meant the end of its new agreements with Rusal.
“We have historical contracts in place with Rusal that we are honouring. Since the conflict in Ukraine began we have not entered into any new contracts, but things could change in the future, it depends on the conflict.”
Although the Russian aluminium company has no sanctions against it at present, many of its buyers have shunned the company due to Russia’s military operations in Ukraine.
Rusal is entering into a particularly important point in the year, as the traditional aluminium “mating season” is quickly approaching. Mating season typically occurs in September and is when buyers and sellers come together to negotiate contracts for the coming year. A poor showing in mating season can have a devastating impact on an aluminium company’s bottom line.
Rusal’s 70 million metric tons account for about 6 percent of the global total of primary aluminium. Although Fisher would not elaborate upon just how much primary aluminium Novelis buys from Rusal, he said the total was “insignificant.” He also declined to discuss expiration dates for the contracts his company has with Rusal.
Fisher said the lion’s share of its purchased aluminium emanates from Canadian smelters.