Bloomberg reports that the Russian aluminium giant Rusal is concerned that up to 36% of its sales could be at risk due to sanctions imposed by the United States and the United Kingdom.
Citing a source close to the company, Bloomberg outlines the potential impact of these sanctions on Rusal’s business operations.
According to preliminary assessments by Rusal, the sanctions could affect at least 1.5 million tons of its annual sales, compared to production of 3.8 million tons last year and sales of 4.2 million tons in the previous year, the source revealed on condition of anonymity.
Consequently, Rusal may be forced to reduce production, paralleling the scenario of the global financial crisis that sharply impacted demand in 2008.
This assessment contradicts the opinions of most Western analysts who argue that the sanctions against Russian metals, imposed on Friday, will have a limited impact on global supply and demand.
The United States and the United Kingdom have banned the trading of new aluminum, copper, and nickel from Russian production on exchanges, including the London Metal Exchange, but the sanctions do not prohibit the sale of metal from producers to traders or consumers.
One of Rusal’s major clients, Glencore, has a longstanding contract to purchase significant volumes of its products.
Rusal is concerned that Glencore may leverage the sanctions to claim force majeure or negotiate a reduced price for the metal, according to the Bloomberg source.
When approached for comment, Rusal’s press service declined to provide a statement to the agency.
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