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. Last Updated: 07/27/2016

Talks Fail to Reach Aluminum Solution

WASHINGTON - A meeting of Western aluminum-producing nations and Russia ended without agreement on output cuts or other specific measures to ease a worldwide aluminum glut.

Another round of talks was set for Jan. 18 and 19 in Brussels.

Government and industry officials gathered for two days to discuss a global surplus that has depressed aluminum prices to their lowest levels in eight years.

In a statement at the end of the talks Thursday, negotiators said they agreed on some objectives and strategies, including considering short-term production cuts and restructuring Russia's aluminum industry.

Western aluminum producers complained that Russia has flooded the market and forced the shutdown of much the West's capacity.

Following the collapse of the Soviet Union, a sharp drop in domestic military and civilian consumption sent Russia's aluminum exports soaring more than six-fold to an expected 1. 6 million tons this year.

At the talks, the U. S. industry called for a cap of 500, 000 tons on Russian exports in 1994, adding that its own members have cut output by 700, 000 tons over the past two years.

Also represented at the international meetings were Canada, Australia, Norway and the European Community.

The EC has already slapped restrictions on Russia, limiting export to 45, 000 tons of aluminum exports to EC countries between Dec. 1 and Feb. 28. According to Interfax, Vladimir Kalchenko, of the Aluminy joint-stock company that controls Russia's smelters, said that the EC acted "extremely tactlessly" in implementing the restrictions on the eve of the Washington talks.

Russian producers, while acknowledging the seriousness of the aluminum glut, rejected the suggestion that they alone should cut production.

Taking these concerns into account, the government negotiators agreed that a strategy should include technical assistance and additional foreign investment for Russia's aluminum industry.

They also called for continued access to Western markets for "substantial flows" of aluminum from the Commonwealth of Independent States.

At the upcoming talks in Brussels, the group will still face the difficult task of deciding how much output should be cut and by whom.

(Reuters, MT)