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Russia's Rusal says new sanctions won't hurt its aluminium supply
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Russia's Rusal says new sanctions won't hurt its aluminium supply
Apr 15, 2024 1:37 AM

*

This content was produced in Russia where the law

restricts

coverage of Russian military operations in Ukraine

(Adds analyst comments, extra detail in paragraphs three, nine,

updates Rusal statement in paragraph six)

MOSCOW, April 15 (Reuters) - Russian aluminium producer

Rusal said on Monday that new sanctions

introduced by the United States and Britain will have no impact

on its ability to supply aluminium.

Washington and London on Friday prohibited metal-trading

exchanges from accepting new aluminium, copper and nickel

produced by Russia and barred the import of the metals into the

United States and Britain.

The London Metal Exchange (LME) on Saturday banned from its

system Russian metal produced on or after April 13 to comply

with new sanctions.

The action is aimed at disrupting Russian export revenue in

response to what Moscow calls a "special military operation" in

Ukraine. Russia is a major producer of aluminium, copper and

nickel.

"The announced actions have no impact on Rusal's ability

to supply since Rusal's global logistic delivery solutions,

access to banking system, overall production and quality systems

are not affected," Rusal said in a statement.

"The U.S. determination does not impose any new prohibitions

or requirements relating to the processing, clearing or sending

of payments by any intermediary banks."

Rusal and Russian mining giant Norilsk Nickel have

not been directly targeted with Western sanctions over the

conflict in Ukraine.

Russia's commodity exporters have sharply expanded supplies

to markets like China and India as Western countries have

imposed sanctions which President Vladimir Putin says amount to

a declaration of economic war by the West.

Goldman Sachs said it did not expect an immediate supply

shock from the LME's move.

"From a fundamental perspective, it is important to

recognise that these exchange focused rule adjustments will not

generate a necessary supply-demand shock," Goldman Sachs

analysts said in a note.

Russian producers can continue to sell metal to other

non-U.S. or UK markets, Goldman Sachs said, but uncertainty

remains as to whether other key ex-China markets and consumers

will also continue to consume the same volumes of Russian metal.

Rusal said the LME actions appeared to be strictly related

to the exchange and derivatives. The company said it would still

be able to provide hedging services to customers and remained

committed to market-based pricing.

Russian mining giant Norilsk Nickel has not yet commented on

the sanctions.

Rusal shares were 2.6% lower in Moscow as of 0801 GMT.

Promsvyazbank analysts said the market was likely still making

sense of the sanctions and their impact.

"Although both Nornickel and Rusal sell most of their metals

under bilateral contracts, their shipments are likely to

decrease and, probably, a new discount to exchange prices will

emerge," Promsvyazbank analysts said.

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