Five European industry associations asked the London Metal Exchange (LME) to ignore calls to ban Russian aluminium from its system, they said in a joint statement on Friday, adding that such a move would damage smaller metal users in Europe.
Earlier this month, Norwegian producer Norsk Hydro (NHY.OL) urged the LME to reconsider its decision not to ban Russian aluminium from its warehouse network.
In a joint statement, the Federation of Aluminium Consumers in Europe (FACE) and four other groups said any restriction of Russian primary metal supplies would have a devastating impact on the EU aluminium industry value-chain.
These calls for bans and sanctions seem one more oligopolistic attempt to easily eliminate a competitor with non market practices and to turn Europe into a captive market,” Mario Conserva, FACE’s Secretary General was quoted as saying in the letter.
The LME decided in November last year not to ban Russian aluminium from its system as there were no western sanctions on the metal since Moscow invaded Ukraine.
The exchange also said a broad section of the market was still buying Russian metal.
Since then, the share of the Russia-made aluminium in available inventories of the LME-registered warehouses has increased sharply.
As it reached 80%, Hydro urged the LME to reconsider it’s decision, saying that large volumes jeopardised the LME contract’s benchmark status .
When asked for comment on the FACE letter, the LME repeated its response to Norsk Hydro’s call: that it would continue to reflect all relevant government sanctions and tariffs, and monitor for any market orderliness concerns in respect of Russian metal.
Europe’s industry group European Aluminium said earlier this month it has considered lobbying for European Union sanctions on Russian aluminium, even as it would oppose specifically targeting Russia’s Rusal, which produces 6% of the global supply and owns smelters in Europe.
FACE in October last year urged European authorities to prevent sanctions against Russian aluminium that, from their point of view, could put thousands of companies out of business.
Four other associations joined FACE’s call: the German Federal Association for Economic Development and three Italian groups – the Foundry Suppliers, Association of Steels, Metals, Scrap and the Foundry Association.
Reporting by Polina Devitt; editing by Veronica Brown and David Evans