Novelis Europe, a subsidiary of the world’s leading rolled aluminium products manufacturer, Novelis, has announced its decision to once again exclude Russian aluminium from its upcoming 2024 metal supply tender. This move comes as the aluminium industry enters the annual phase of negotiations, known as the “mating season,” where consumers, producers, and traders finalize agreements for the purchase and sale of aluminium for the following year.
Novelis has continued to source some aluminium from Russia’s Rusal under existing contracts that were established before Russia’s invasion of Ukraine last year. However, the company has abstained from entering into any new deals for Russian aluminium, as confirmed by the CEO of the U.S.-based corporation in August.
Emilio Braghi, Executive Vice President and President of Novelis Europe, elaborated in comments to the media at LME Week.
“Novelis Europe has been fulfilling some remaining contractual obligations with Russian aluminium suppliers. […] We are excluding Russian sources in our 2024 tender to supply aluminium to our Novelis plants in Europe.”
At present, Russian metal is not subjected to sanctions, but a significant number of consumers have opted not to purchase aluminium produced by Rusal, which accounts for 6% of the world’s mined aluminium production.
Novelis, owned by India’s Hindalco Industries, holds the distinction of being the world’s largest aluminium recycler, boasting production and recycling facilities across Europe. The growing environmental concerns surrounding plastic packaging have led to an increased demand for aluminium packaging.
Emilio Braghi remarked, “We continue to see a trend towards aluminium beverage packaging, especially for beer and carbonated soft drinks.” He highlighted the rising popularity of energy drinks and ready-to-drink cocktails in aluminium cans. Additionally, the implementation of more stringent packaging regulations in certain countries and a shift in consumer behavior away from plastic packaging have further fueled the transition towards aluminium cans.
Braghi also pointed out that the continued growth of electric vehicles and the aerospace sector’s strong recovery following the COVID-related downturn are driving sales of aluminium. However, he acknowledged challenges in the building and construction segment due to high interest rates, increased labor costs, and general supply constraints, resulting in market uncertainty.
Furthermore, aluminium production cuts in Europe from the previous year due to elevated energy costs have yet to be reversed. Braghi noted that, “From a short-term view, the smelting curtailments in Europe cause a shift to higher imports of aluminium, despite the moderate demand situation.”