Rusal in Talks With Customers for 2020 Supply Contracts

Reuters quoted six industry sources as saying that aluminum group Rusal is in talks with customers to agree 2020 supply contracts, marking the first round of autumn negotiations since sanctions against the Russian company were lifted in January. Rusal starts the aluminum industry’s so called “mating season” hoping to win back customers lost a year ago due to the sanctions which hit the company’s bottom line and roiled world aluminum markets.

Washington lifted the sanctions on Rusal in late January, after intense negotiations and a series of organizational changes within Rusal. The measures on its co-owner Oleg Deripaska remain in place.

One of Rusal’s largest clients, when asked if they would take into account any associated risks when discussing next year’s contract said that “Sanctions are over. No one is talking about sanctions, nobody. There’s no threat of that.”

Sources said that Rusal and other aluminum producers are under pressure to cut prices for 2020 contacts because of weak market conditions.

Potential customers are also trying to use Rusal’s sanctions experience “as leverage”, an aluminum trader said, but this is also a consequence of a well-supplied market, where the trader said it was hard to find anyone bullish.

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