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Russian Union of Metal and Steel Suppliers reviewed Aluminum question

11 March 2015

In February, it held a meeting held in the office of the Russian Union of Metal and Steel Suppliers. The main issue was the possibility of providing alloys and primary aluminum profiles manufacturers, rental and other aluminum products. The meeting was attended by over 30 representatives of private businesses and government agencies. Among them were representatives of the FAS, the Ministry of Industry and Trade of the Russian Federation, the company «RUSAL», «Alutech», «Tatprof» MAC, «Plant of aluminum alloys," and so on.

The main impetus for the organization of the meeting was the embarrassing situation observed today in the domestic market. In accordance with the statements of the participants, the price of primary aluminum and alloys supplied «RUSAL» Russian manufacturers of semi-finished aluminum, rose by almost 90%. At the same time, a sharp jump in the exchange rate with respect to RUB and loan interest rates. The end-user reduces the expected volume of demand, as the possibility of payment of aluminum products fizzles.

Leading enterprises focused on the production of aluminum rolled products and profiles, or were forced to reduce staff time. Also, manufacturers of semi-finished aluminum predict a decrease in demand for their own products at a rate of 20−30%. Accordingly, we can expect the fall in capacity utilization, forgetting about the possibility of a positive outlook for the near future. Negative factor looks sales policy of «Rusal», carried out by the formula «cost regional LME + premium». This policy, according to the company's consumer product, divorced from the real market situation.

However, an overall assessment does not affect the opinion of «Rusal». The company continues to provide domestic producers with long-term contracts at fixed low discount Purchase volume. In some cases, consumers refused to transactions in similar conditions. Then the part of the representatives of «Rusal» voiced the threat of a complete cessation of the supply of primary aluminum and its alloys.

As a result of it, the meeting decided to refer to the FAS, the Ministry of Industry and Trade of Russia, as well as other agencies. The main treatment goal — the organization of influence on pricing and marketing policy of the company «RUSAL» in the domestic market.

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