Japanese companies began to search for new suppliers of aluminum due to fear of falling under US sanctions and the inability to pay with Rusal dollars.
The largest purchasers of aluminum in Japan refused to continue buying metal from the Russian company Rusal, introduced by the US authorities on April 6 in the Specially Designated Nationals List (SDN), Reuters reports citing its sources in the industry. Previously, the US Treasury had warned that partners of SDN companies could also be subject to sanctions.
"We asked Rusal to stop supplying aluminum under our contracts, as we can not make payments in US dollars and do not want to take the risk of falling under US secondary sanctions," an employee of one of the Japanese trading houses who asked to remain anonymous in connection with confidentiality of the topic.
Another well-informed source Reuters confirmed that other customers of the company in Japan were asked to stop the supply of aluminum for similar reasons.
Official representatives of Japanese companies cooperating with Rusal, including Mitsubishi, Marubeni and Mitsui, declined to comment, saying that they did not discuss this issue with the press. At the same time, the representative of Sumitomo admitted that the company is discussing possible ways of alternative supplies of aluminum.
According to the Japan Aluminum Association, so far the country has bought about 300 thousand tons of aluminum in Russia, which is 16% of its total imports. The experts interviewed by Reuters believe that Japanese consumers of this metal can find new suppliers in Australia, Malaysia, India and the Middle East, but it will be more difficult to find suppliers of aluminum products with added value.
On April 10, the London Metal Exchange (LME) announced the suspension of aluminum trading in Rusal, accounting for about 10-20% of the company's sales. On April 11, the New York Mercantile Exchange canceled the permissions for the supply of metal brands UC Rusal for futures contracts. Against the backdrop of fears of a deficit in aluminum prices for it have sharply gone up. On April 12, the cost of a ton of aluminum for LME for the first time since March 2012 exceeded $ 2,300. April 16, the price of a ton of aluminum for the first time since September 2011 has risen above $ 2,400.
"Sanctions turned out to be a complete surprise for us, and we almost have a panic here," one of the interlocutors of Reuters says.
April 16, the value of shares of Rusal on the Hong Kong Stock Exchange collapsed by more than 30%, falling to a historic low of 1.41 Hong Kong dollars (HKD) per share. April 17, the value of securities fell to 1.31 HKD, but by the close of trading rose to 1.54 HKD, which is 8.45% higher than the level of closing of previous trades.
Shares of American companies Alcoa Corp. and Century Aluminum Co. for the past week have risen in price by 14 and 9.5% respectively. Papers of the Norwegian Norsk Hydro ASA, Chinese Aluminum Corp. of China Ltd. and Indian Hindalco Industries Ltd. grew by about 10%, according to Bloomberg.