Christopher Burnham has commented on the article published by Bloomberg on 12 October.
Christopher Burnham, Chairman of En+, the world’s leading producer of low carbon aluminium and independent hydropower has commented on the article published by Bloomberg on 12 October.
The En+ Group is a global company with more than 90,000 employees and 60 assets in 12 countries including operations in Jamaica, Ghana, Guyana, Ireland, Italy, Germany, Sweden, Ukraine, and Russia. The Group provides aluminium and aluminium alloy for can companies, major automotive companies, as well as aerospace and construction companies in more than 50 countries worldwide.
On the basis of the news from Bloomberg the London Metal Exchange (LME) price for aluminium immediately jumped $165.00 and closed $69.00 higher based on speculation.
He said:
“The article is simply wrong. We remain in full compliance with OFAC’s requirements including the Terms of Removal agreed in 2018 and we are committed to fulfilling our contracts in the USA and worldwide. When the US sanctioned RUSAL aluminum in that year, the LME price jumped 29% and there was a scramble to find alternative material by US manufacturers.”
He continued:
“Irresponsible market speculation of this sort only benefits our competitors who have publicly advocated for restricting our market access, but hurts the American consumer and the US economy - risking more than 164,000 direct and 470,000 indirect jobs in potentially affected downstream industries, including aerospace, automotive, truck trailer, packaging and healthcare goods, building and construction, and solar & wind power generation.
“It hurts customers too, potentially adding thousands of dollars to the prices of cars and trucks. We know wire and cable producers are already suffering by paying an inflated price for Russian origin wire rods with 45% duty. Wire and cable producers are vital contributors of decarbonization in the USA, supplying their products to solar and wind projects along with standard overhand-conductors”
RUSAL has served the US aluminium industry for 18 years as a steady contributor to the US economy, providing products that are not otherwise available to domestic consumers. "The Company has in the past raised its concern over growing escalation in Ukraine and supports the restoration/establishment of peace in the region."
Background
1. Domestic production provides only 20% of the total aluminium consumption. The rest of its aluminium is imported from other countries. Canada is the main supplier of aluminium to the US. Its share is more than 60% of all imports. US manufacturers depend on imported metal as the aluminium manufacturing base in the US is over 4 million tons short of what can be supplied from the US. Approximately 40% of the shortage needs to be be covered by off-shore metal suppliers
2. Any ban or sanction will spike pricing and lead to higher inflation in the US. The aluminium downstream and processing companies are in danger of losing their competitiveness against imported goods due to high costs of raw materials.
3. In the absence of green, low carbon aluminium from RUSAL the US consumers will also have to depend on more expensive and much more carbon intensive aluminium.
4. Aluminium is one of the important metals for the US economy. Annually, the country consumes more than 5.3 Mt of primary aluminium and ~4.6 Mt of secondary aluminium. At the same time, the annual increase in the consumption of primary aluminium in the United States is about 3%.
5. The United States accounts for 12% of global car production in 2021 - so the main aluminium consumption sector is the automotive industry (36.2%). The second largest sector of aluminium consumption in the US is packaging (25.6%).
