United States hints at relieving pressure on Russia's RUSAL if owner sells firm

Randal Sanchez
April 24, 2018

The US Treasury also said that if Russian oligarch Oleg Deripaska sold the company, it could "provide sanctions relief".

European leaders had been working to persuade Pres. Trump to ease sanctions on Russian Federation, and Treasury Secretary Mnuchin said the "impact on our partners and allies" factored into the USA reprieve.

That's important because the sanctions had all but frozen trade flows - most critically in the market for alumina, the raw material used to make finished aluminum.

Thus, the U.S. authorities make it clear that sanctions can be mitigated if Deripaska sells his assets and abandons the company.

The sanctions barred Americans from doing business with Rusal and put pressure on world aluminum supply. "Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider RUSAL's petition".

The United States on Monday opened the door to sanctions relief for Russian aluminum producer United Company Rusal Plc 0486.HK, saying it was considering a company bid to avoid USA sanctions and would weigh the impact on American allies and partners.

To recap, on April 6, the US Treasury imposed fresh sanctions on 26 Russian tycoons and officials, including Oleg Deripaska, Igor Rotenberg, Kirill Shamalov, Viktor Vekselberg, Suleyman Kerimov, Vladimir Bogdanov and Andrey Skoch.

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Rusal declined to comment on the matter when contacted by Metal Bulletin. Deripaska's spokeswoman wasn't immediately available.

Rusal - the world's second-biggest aluminum producer - has been particularly hard hit as the sanctions have caused concern among some customers, suppliers and creditors that they could be blacklisted too through association with the company.

While analysts have suggested that nationalisation may be the only solution, Russian Finance Minister Anton Siluanov told reporters on Friday that Rusal was not on the list to be nationalized.

Daniel Briesemann, an analyst at German lender Commerzbank, said the Treasury's announcement should calm things down.

Palladium plunged by as much as 5.4 percent and nickel as much 6.7 percent. "It looks as if there was a lot of pressure from the USA aluminium downstream industry".

It's not clear whether the Treasury's moves on Monday will automatically allow global companies to resume their deals with Rusal.

The market has seen offers for duty-unpaid aluminium in Rotterdam as high as $200 per tonne in recent sessions, but several market participants no longer see such prices as achievable following the Treasury's latest decision.

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