A ban on Rusal will destroy European industry, business groups say

Oct 24 (Reuters) – Five European industry associations said on Monday they had urged European authorities to prevent sanctions, tariffs or boycotts on Russian aluminum, which they said could put thousands of companies out of business.

Russia’s Rusal (RUAL.MM) produces about 6 percent of the world’s aluminum. The metal was not targeted by Western sanctions against Russia following Russia’s invasion of Ukraine.

But the United States is considering limiting imports of Russian aluminum, and the London Metal Exchange (LME), the largest metals trading hub, is asking members whether it should ban Russian material from its systems.read more

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Some companies have said they will stop buying Russian aluminum, while others such as Alcoa (AA.N) are lobbying for measures against Russian metal.read more

In a joint statement, the associations said they had written to EU authorities and “requested the European Commission and EU Member States to intervene urgently in response to a ban on Russian aluminium, high tariffs or threats of sanctions that pose an imminent threat to the EU. A major threat to the European aluminium industry.”

Those boycotting or calling for measures against Russian metal “are either its main competitors or enjoy supply options that are overwhelmingly unavailable to the European aluminium value chain,” the statement said.

For Europe’s smaller aluminum users, the measures against Russian metal could lead to “the immediate consequences of thousands of European companies failing and tens of thousands of job losses,” it said.

European industries are under pressure from high inflation and a rapidly slowing economic growth, while high energy prices have shut down more than 1 million tonnes of aluminium production in Europe since 2021.

In 2018, aluminium prices surged 35% in a few days after the US sanctioned Rusal and the LME blocked its metal.

The five associations are the Federation of European Aluminium Consumers (FACE), the German Federal Association for Economic Development and Foreign Trade (BWA), the Italian Association of Foundry Suppliers (Amafond), the Italian National Association of Steel, Metal, Scrap, Hardware (Assofermet) and Italian Foundry Association (Assofond).

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Reporting by Peter Hobson and Pratima Desai; Editing by Bernadette Baum

Our Standard: The Thomson Reuters Trust Principles.

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