Photographer: Andrey Rudakov / Bloomberg
Photographer: Andrey Rudakov / Bloomberg
In March, United Co. Rusal registered a record month for shipments to both the US and North America, and the region’s top management does not expect a slowdown in growth due to a sharp rise in industrial metal demand.
According to Rusal America CEO Brian Hesse, the US division of the world’s second largest aluminum producer delivered more than 25,000 metric tons of aluminum in the best month for deliveries to North America. He sees similar monthly rates for the remainder of the year to hit an annual record for the region.
“We are moving away from Covid and I don’t think people expected everything to be so reliable,” Hesse said in a telephone interview Thursday. “We planned this, and we got additional clients, so these same people are in the marketplace now, desperate to grab material.”
Rusal’s optimistic outlook is driven by the fact that global aluminum prices have peaked in four years and regional premiums are approaching record levels, indicating a growing consumer demand for light metal. The recovery in the US economy is spurring demand for a range of products that require aluminum, including beer cans, window frames, and recreational vehicles.
Compromises
Supply growth requires compromises. Shipping and freight costs are “skyrocketing,” Hesse said, especially with regard to freight, forcing Rusal to rely more on rails and barges in the US. As maritime traffic is bouncing back after the Suez Canal lockdown, management said ships are delayed by an average of a week due to demand for all products – aluminum or other commodities.
Rusal America’s customer base was 100% OE in March, Hesse said, marking a new shift. Before the US government struck Due to sanctions against Rusal in 2018, most of the business of the Moscow company was in trading houses.
Hesse’s upbeat expectations are a turnaround from last year, when aluminum companies turned pessimistic in the midst of a pandemic as they difficulty understanding how long it will take to introduce a vaccine and rebuild the economy. Scarcity now presents other problems. Production of billet, a key metal required for the automotive and construction industries, surged to near a record level earlier this year as consumers faced metal shortages.
Alcoa Corp., one of the world’s largest manufacturers, said last month that there is a strong recovery in demand globally and in China, the largest consumer. The base price on the London Metal Exchange is up 15% this year, the best start since 2017.
There is still some uncertainty in the US market. General Motors Co. said Thursday that it is temporarily idle or extending shutdowns at several plants in North America due to ongoing semiconductor shortages. And the Biden administration still hasn’t decided what it would do with national security tariffs on aluminum imports.
Despite these concerns, Hesse said they will be more than offset by overall demand as the economy picks up momentum by the end of the year.
Crude Oil Jun 21 
