"Rusal" needs discounts for travel expenses

The company asks for preferential rates for transport tariffs.
Following the privileges on the energy market, En + Oleg Deripaska has already applied to the government, Rusal, which is part of it, asks for certain indulgences: from July 1, to cancel the export surcharge for transportation of its finished products and reduce tariffs for transportation of raw materials. According to "Kommersant", "Rusal" is counting on benefits, since it considers its tariff load to be too high. But sources in JSC Russian Railways note that transportation costs are only 3% of Rusal's total costs and the monopoly is already losing funds from the failure to provide them with cargo.

As it became known to Kommersant, in early June, Rusal appealed to Prime Minister Dmitry Medvedev with a request to help the company through reducing the costs of rail transportation of raw materials and finished products. Two sources familiar with the text of the appeal informed Kommersant about this. In the apparatus of the supervising vice-premier Maxim Akimov, operative comments were not given.

Rusal, along with other assets of Oleg Deripaska and the businessman himself, fell on April 6 under the most stringent US sanctions, making it difficult to export the company's products, causing panic in the market and the rise in prices for aluminum and alumina. As a result, the US Treasury had to make some allowances, allowing it to continue business with the company until October 23 and extending the timeframe for its bonds and shares to expire before August 5. Similar measures have been taken against En + Group, which unites the industrial assets of Mr. Deripaska. Washington is ready to lift sanctions if the businessman gives in to control of assets.

Nevertheless, En + has already asked the government for a number of privileges on the energy market of about 45 billion rubles. (see "Kommersant" on May 28), and now it's Rusal's turn. In 2017, alumina assets of Rusal produced 7.8 million tons of alumina (three Russian plants - 2.8 million tons), aluminum production was 3.7 million tons, sales - 3.9 million tons, about 80% for exports . According to the source, familiar with the content of the appeal, the company estimates the cost of rail transportation of raw materials and finished products in 2017 to 24 billion rubles. and asks from July 1 to lower the tariffs of JSC Russian Railways.

First, it is a question of the tariff for transportation of alumina, to which in some cases an additional factor of 1.64 is applied. "Rusal" requests the FAS to instruct to reduce it from July 1, so that for alumina transportation conditions equaled with coal (coefficient 0.895). The second is surcharges within the tariff corridor, which are set by the Russian Railways itself. "Rusal", the source of "Kommersant" tells, asks to cancel in an accelerated order a surcharge of 8% to the tariff for the export of aluminum alloys, wire rod and rolled metal.

In "Rusal" and OJSC RZD refused to comment. The FAS has promised to consider the issue if an assignment is received. A source close to Rusal noted that "the aluminum industry is in fact a donor for a number of other shippers" and the company has to pay more freight for real cargo transportation by Russian Railways. "The share of transportation costs in the final product price of RusAl has always been significant, several times higher than the level of foreign competitors," Kommersant source said. "In conditions of sanctions, one of the ways to support the plants could be a temporary reduction of a part of the transport component."

But the source of Kommersant, close to JSC Russian Railways, notes that the main share of expenses in the production of aluminum falls on electricity and raw materials. The total transportation costs (shipping aluminum and alumina delivery) averaged $ 70 per tonne, or 3% of total costs. "At the same time, Russian Railways is already losing a significant amount of revenue from the decrease in the transportation of aluminum," Kommersant's interlocutor notes in the monopoly.

Rusal has a certain logistic specificity associated with the need to import alumina, as well as the location of the main aluminum production facilities in Siberia, far from the ports, says Mikhail Burmistrov, head of Infoline Analytics. In the future, he believes, the company may incur additional costs due to a change in the geography of exports and the need to give discounts to buyers, so there is logic in Rusal's request, but only if the company is ready to guarantee the preservation of production and jobs.