Sanctions A Dim Memory As Rusal Enters 2020 Aluminium Mating Season

Sanctions A Dim Memory As Rusal Enters 2020 Aluminium Mating Season

Russian Federation aluminium behemoth U.C. Rusal is entering a far different mating season this year than last according to sources who spoke with Reuters last week, noting that the traditional negotiating window for next year’s contracts is brisk for the sanction-free firm.

Per one of the half-dozen sources, last year’s sanctions on the company are the furthest thing from the minds of both buyers and Rusal’s sales agents.

“Sanctions are over. No one is talking about sanctions, nobody… There’s no threat of that,” explained one of Rusal’s biggest buyers to Reuters. The unnamed buyer confirmed that his firm didn’t factor in the return of any sort of sanctions when negotiating for next year’s supplies.

Other sources said that Rusal and other aluminium sellers are facing pressure to cut prices due to expected weak market conditions in the coming year. A second seller said that few contracts have been signed to date but some buyers are attempting to use last year’s sanctions as a leverage to bargain down prices. However, a market in surplus translates to a scarcity in bullish traders.

“If the market was very strong there would not be the same pressure on producers, Rusal included, to concede to lower terms,” explained the second anonymous trader.

A third trader told Reuters that they had not been offered any discount due to the risk of potential sanctions, noting that Rusal’s asking price is well within the market average.

“They assured us that there are no sanctions risks anymore,” he said. “Whether we buy this year just depends on the price.”

A European trader said that sanctions did not bother most buyers, as those who had pre-existing contracts with the firm faced no hindrance in having those contracts enforced even under sanctions. The European trader opined that Rusal has a golden opportunity to expand in the Spanish market in the next year as well, though he did not give particulars.