On Friday, five European industry associations said in a joint statement that they asked the London Metal Exchange (LME) to ignore calls to ban Russian aluminum because it would hurt smaller metal consumers in Europe.
Last week, Norway's Norsk Hydro urged the LME to reconsider its decision not to ban Russian aluminium from its storage network because large supplies were jeopardising the benchmark status of its contracts. Rusal responded at the time that Hydro was destabilising the market for its own benefit.
And Hydro's appeal is not gaining traction in Europe, where the latest news suggests, Five groups, the Federation of European Aluminium Consumers (FACE), the German Federal Association for Economic Development and Foreign Trade (BWA), the Association of Italian Foundry Suppliers (AMAFOND), the Italian Association of Scrap, Raw Materials and Steel Products Distributors (ASSOFERMET) and the Italian Foundry Association (ASSOFOND), said, Any restrictions on Russian sources would have a "devastating" impact on the EU's aluminium value chain.
"These calls for bans and sanctions appear to be yet another attempt by an oligopoly to easily eliminate competitors with non-market practices and turn Europe into a market controlled only by them," Mario Conserva, the general secretary of FACE, wrote in the letter.
Russia is a major exporter of aluminum, steel, titanium and other metals, and aluminum production accounts for about 6% of the global total. In November, the LME decided not to ban delivery of new Russian metals after consulting the market. Since then, the share of aluminum, a metal from Russia, in LME inventories has risen significantly.
Russian aluminium accounted for less than 18 per cent of available aluminium stock in LME-registered warehouses in October, rising to 41 per cent in January, 68 per cent in May and 80 per cent in June. Hydro believes this share of supply is jeopardising the benchmark status of the LME contract.
The European Aluminium association said earlier this month it was also considering lobbying the EU to impose sanctions on Russian aluminium, but was not targeting Rusal specifically.
It is worth mentioning that in October last year, five groups asked the European Commission and EU member states to take urgent intervention measures to prevent Russian aluminum from being imposed sanctions, boycotts, high tariffs and so on.
(www.profiles-aluminum.com; sales@profiles-aluminum.com).
