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Japan traders ask Rusal to stop shipping aluminium after U.S. sanctions

From Reuters - April 17, 2018

TOKYO (Reuters) - Major Japanese trading houses have asked Russias United Company Rusal to stop shipping refined aluminum and other products in light of U.S. sanctions on the worlds No.2 producer and are scrambling to secure metal elsewhere, industry sources said.

The United States imposed major sanctions on April 6 against seven Russian oligarchs and 12 companies they own or control, saying they were profiting from a Russian state engaged in malign activities around the world. This included Oleg Deripaska, his Hong Kong-listed company Rusal and his new holding company En+ Group.

This has left many Japanese buyers with concerns about tightening availability, nearly doubling domestic spot premiums for aluminum and lifting global prices by a fifth.

We have requested Rusal stop shipments of aluminum for our term contracts as we cant make payment in U.S. dollars and we dont want to take the risk of becoming a secondary sanction target by the United States, said a source at a trading house,who declined to be named due to the sensitivity of the issue.

Another source with direct knowledge of the matter also said major Japanese trading houses have asked Rusal to stop shipments for the same reason.

Rusal in Moscow declined to comment on the matter.

Rusals Japanese clients include trading house such as Mitsubishi Corp, Marubeni Corp, Sumitomo Corp and Mitsui & Co.

Mitsubishi, Marubeni and Mitsui declined to comment, saying they do not talk about specific commercial deals.

We are holding internal discussions on what actions are needed to take, a Sumitomo spokesman said. The trading house is also talking with customers about alternative supplies, he said.

Other Japanese buyers, including fabricators, are also still considering how best to deal with the sanctions on Rusal.

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