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31 Jul, 2023 12:42

Calls to ban Russian aluminum ‘expose EU market manipulation’ – industry association

The bloc’s metal producers want to use sanctions to kick out Russia’s Rusal, a federation of aluminum consumers has claimed
Calls to ban Russian aluminum ‘expose EU market manipulation’ – industry association

Five EU-based business associations representing aluminum consumers have called on the London Metal Exchange (LME) to reject demands for sanctions on Russian primary metal, describing the pressure as “obvious market manipulations,” according to a statement by the Federation of Aluminium Consumers in Europe (FACE) released on Friday.

Last week, Norwegian producer Norsk Hydro urged the LME, the world’s largest and oldest market for industrial metals, to reconsider a decision made in March not to ban Russian aluminum from its warehouse network. Norsk Hydro argued that Russian aluminum, which is subject to US sanctions, dominates the LME warehouse stock and poses risks to the market.

According to the letter sent to the LME on Friday by the Belgium-based FACE along with four associations from Germany and Italy, the calls to ban Russian aluminum are “obvious market manipulations by vested interests,” as they were made by major metal producers who are direct competitors of Russian manufacturer Rusal.

Such a ban would be “suicidal” in the current context of the “huge metal deficit” in Europe, high energy prices, and inflation, the FACE statement claimed.

Calls for sanctions “seem one more oligopolistic attempt to easily eliminate a competitor with non-market practices and to turn Europe into a captive market, with full knowledge of the devastating impact any restriction of Russian metal supplies will have on the EU aluminum industry value-chain”, said Mario Conserva, FACE’s secretary general.

He pointed out that small and medium-sized businesses represent 90% of the EU aluminum industry workforce and 70% of its output, but their interests are not taken into account when trade and supply policy decisions are made.

Earlier this month, Reuters reported that EU industry group European Aluminium had warned against placing sanctions on Rusal “due to its strategic importance on the global aluminum market.”

According to FACE, the EU is dependent on other countries for nearly 90% of its primary aluminum needs. Rusal accounts for about 12% of the bloc’s current demand, the association said. The industry body described Rusal’s output as competitive and fairly priced, and claimed that it helps decrease the carbon footprint of the entire European aluminum industry.

The Russian aluminum industry has increasingly become a target for Western restrictions. In February, the US imposed 200% duties on imports of Russian-made aluminum products, while the following month Canada banned imports of Russian aluminum and steel. In May, the UK also revealed plans to ban imports of Russian aluminum. The EU has so far restricted imports of only a limited number of specific aluminum products from Russia.

For more stories on economy & finance visit RT's business section

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