Russian aluminium giant Rusal is struggling to sell its metal in Western markets, following a new round of US sanctions targeting some of Russia's biggest tycoons last Friday, Bloomberg reported.
Aluminium prices have soared more than 10 percent, with the London Metal Exchange (LME), the world’s biggest metals exchange, refusing to accept new Rusal supplies.
Metal supplied by billionaire Oleg Deripaska’s firm is estimated to make up a third of inventories on the LME. Rusal accounts for six percent of global output of aluminium.
In the aftermath of the new sanctions, Glencore, an Anglo–Swiss multinational commodity trading and mining company, declared force majeure on about 50,000 metric tons of contracts that specify the metal should be of Russian origin, Bloomberg reported, citing people familiar with the matter.
Separately, international trading houses have stopped buying from Rusal, with CME Group Inc.’s Comex stating it won’t allow deliveries of Rusal material.
Though there is still some uncertainty over what will happen to Rusal and its metal, the Russian government is said to be working on a plan to support the company, the report said.
However, Russian Finance Minister Anton Siluanov has already ruled out plans for the government to buy a stake in Rusal.
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