The aluminum industry is running out of time to avoid another crisis as U.S. sanctions leave United Co. Rusal locked out of crucial contract negotiations kicking off this week in Berlin.
The U.S. allowed Rusal customers with existing supply deals to keep doing business with the company until Oct. 23, but not to sign new contracts.
Unless the U.S. Treasury lifts the sanctions in time — which remains a possibility — the No. 2 supplier of aluminum will be sidelined from the annual negotiations and could soon be forced to scale back output of products used in everything from alloy wheels to airplane fuselages.
The aluminum industry is still reeling from April’s crisis, when U.S. sanctions targeting oligarchs including Rusal’s billionaire owner Oleg Deripaska forced customers to stop dealing with the company, sending prices spiking. Rusal is the biggest aluminum producer outside of China and its refining operations form a crucial cog in the global supply chain.
Calm returned to the market after the U.S. softened its stance to introduce the Oct. 23 deadline. However, that’s now threatening to unravel unless Rusal can secure a deal with the Treasury soon. The industry typically negotiates annual supply deals on the sidelines of the Metal Bulletin aluminum conference, taking place this week.
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