Glencore, a commodities trader, reportedly supplied substantial quantities of Russian Origin aluminium to LME-registered warehouses at Gwangyang, South Korea. According to two persons with inside knowledge of the situation on Tuesday.
The aluminium shipped to Gwangyang, according to a second source with inside knowledge, was made by Rusal.
Deliveries to LME warehouses underline the challenge facing Rusal (RUAL.MM). The largest producer of aluminium outside of China. When 2022 contracts expire as buyers steer clear of Russian metal seeking 2023 contracts, according to one of the source.
Some importers and end users of aluminium in the packaging, building. And transportation sectors do not wish to accept Rusal’s aluminium into their goods.
Rusal’s aluminium is one example of an unwanted metal that frequently finds its way into the LME marketplace, a market of the last option for buyers and sellers.
The sources did not indicate how much aluminium from Rusal had been shippe by Glencore to the Gwangyang LME warehouses.
The London Metal Exchange and Glencore declined to comment.
In April 2020, Rusal and London-listed Glencore (GLEN.L) reached an agreement for a long-term supply of 6.9 million tonnes of aluminium. In 2020, 344,760 tonnes of that would be provided. And between 2021 and 2024, around 1.6 million metric tonnes would be produce annually
RUSAL ALUMINIUM PRODUCTION
The LME released a discussion paper earlier this month on the idea of forbidding the trading and storage of Russian copper, nickel, and aluminium in its system.
A more than 7% increase in aluminium prices was caused by last week’s Wednesday news that the Biden government was considering limiting imports of Russian aluminium as a potential retaliation to Moscow’s military aggression in Ukraine.
Aluminum traders claim that the hasty response brought on by concerns over shortages in the event that Rusal was sanction.
The largest producer of aluminium outside of China is Rusal, which will produce 6% of the world’s expected 70 million tonnes of aluminium this year.
On Friday, the amount of aluminium at LME warehouses increased by 65,825 tons to 433,025 tonnes. Of those, 44,675 tonnes went to Port Klang in Malaysia and 23,525 tonnes went into Gwanyang in South Korea.
According to a source in the aluminium sector. “A few things well over past few days that made people sit up and realise the issues facing Rusal.”