Glencore chooses to continue with Rusal for acquiring aluminium in 2023 despite ban on LME

As per the contract recently signed between Glencore and Rusal, the former will acquire aluminium from the latter next year. "Glencore are going to take aluminium from Rusal next year," one of the sources said, declining to detail the quantity and adding that negotiations with consumers to sell the remainder of Rusal's product were still going on.

In April 2020, Rusal signed a long-term aluminium supply contract of 6.9 million tonnes with Glencore, of which 344,760 tonnes were due to be delivered in 2020 and about 1.6 million tonnes a year between 2021 and 2024.

However, the renewal of the contract between Rusal and Glencore for 2023 has come as a surprise to the industry as the market expected many would shun Rusal’s metal in 2023 after the ban called for Rusal’s aluminium on the London Metal Exchange (LME) by the US-based Alcoa and Norway’s Norsk Hydro. Some were even speculating that Glencore would also eschew Rusal despite the company’s close association with it.

But European business groups representing consumers opposed restrictions against Russian aluminium. According to them, those calling for measures must have other supply options which are not available to Glencore and many such European companies.

As per some sources, Rusal has already sold 76 per cent of its primary aluminium and value-added products for next year. They also said that Rusal’s, the world’s largest aluminium producer outside China, production of primary aluminium would be standing at 4.2 million tonnes next year.

Aluminium consumers and producers were engaged in negotiations for 2023 since September. "Talks have taken longer than usual because there is so much uncertainty about aluminium demand next year," an aluminium buyer said, adding that the possibility of the LME banning Russian metal was also creating uncertainty.

So far, both Glencore and Rusal have yet to comment on the renewal of the supply contract for 2023.

source https://www.alcircle.com/news/glencore-chooses-to-continue-with-rusal-for-acquiring-aluminium-in-2023-despite-ban-on-lme-85954