News agency Reuters reported on Tuesday that Glencore plc has delivered significant amounts of aluminium from Russia to warehouses in the Republic of Korea (South Korea) registered to the London Metal Exchange and originating from UC Rusal.
Two sources claiming knowledge of the situation told Reuters this week that the shipments of Rusal’s aluminium arrived in Gwangyang, but they were unable to identify an amount that was received.
According to Reuters, stocks of aluminium at LME warehouses rose by 65,825 metric tons to 433,025 metric tons, with 44,675 metric tons moving to Port Klang and 23,525 metric tons arriving at Gwangyang.
Industry sources say that Rusal’s actions have drawn wide notice in the field.
“A few things over the past few days have made people sit-up, realise the difficulties facing Rusal.”
Rusal entered into an agreement with Glencore in the spring of 2020 to supply Glencore with 6.9 million metric tons of primary aluminium, of which about 1.6 million would be sent each year between 2021 and 2024.
The LME has been mulling the possibility of banning Russian aluminium, nickel, and copper from its warehouses. Though not formally sanctioned, Rusal has encountered difficulties in selling its goods on the international market due to backlash against the Russian government’s invasion of Ukraine in February this year.
Frequently the LME’s warehouses are the last stop for aluminium and other metal inventory that are not sold to consumers and other downstream buyers. Rusal has found itself with significant stores of such aluminium due to buyers in the transportation, construction, and packaging industries’ unwillingness to purchase from Russian suppliers.
Rusal did not respond to a request for comment from Reuters, and Glencore and the LME declined to go on the record on the subject.