U.S. `Takes Grenade Off the Table’ With Tweak to Rusal Sanctions – by Jack Farchy and Yuliya Fedorinova (Bloomberg News – September 18, 2018)

https://www.bloomberg.com/

The U.S. has laid the groundwork to avoid a brewing crisis in the global aluminum market. By making a technical tweak to sanctions on United Co. Rusal on Friday, the U.S. Treasury handed a potential lifeline to buyers of aluminum whose annual contracts with the Russian company are soon due to expire.

That makes it less likely there will be a repeat of the chaos that gripped the aluminum market in April when the curbs were first imposed.

Crucially, the U.S. said that Rusal’s existing customers could negotiate some new contracts, but stopped short of lifting the aggressive sanctions off Oleg Deripaska, the Russian billionaire who has been accused by the U.S. of links to organized crime and bribery.

“Particularly in alumina where you could have had a major crisis, this takes the grenade off the table,” said Eoin Dinsmore, an aluminum specialist at consultancy CRU Group.

While the tweak shows the Treasury is responding to the aluminum industry’s concerns, it will still require further action by the U.S. to avert turmoil: without an extension of the Oct. 23 deadline, companies will have to stop all dealings with Rusal by that date.

The situation is especially important now because it’s the time of year when aluminum makers are signing annual contracts.

For the rest of this article: https://www.bloomberg.com/news/articles/2018-09-18/u-s-takes-grenade-off-the-table-with-tweak-to-rusal-sanctions

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