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. Last Updated: 07/27/2016

Aluminum Talks Focus On Proof

MONTREAL -- Officials from major aluminum-producing nations meet this week in Ottawa to cement a plan to cut output of the overabundant metal, but the biggest issue they face is how to monitor and verify the proposed cuts.


Representatives from the European Union, Canada, Russia, the United States, Norway and Australia plan to finalize a deal drawn up last month that aimed to slash 1.5 to 2 million tons of capacity over the next 18 months.


Industry analysts expect delegates to review cuts made since the last meeting and work out a monitoring system.


Analysts say a stumbling block is how to get Russia to be more open and consistent in presenting data on how much aluminum it produces, what it exports and what it consumes internally. "We need to understand where they're coming from," a one Western delegate.


Jim Southwood, president of Commodity Metals Management, said another issue to address is whether production curtailments in Russia will lead to export limits, since the Russian government has control over exports.


Under the terms of the pact, Russia was to cut 500,000 tons in two different tranches. But so far, producer group Aluminy has been the only one to cut, with a 100,000 ton reduction.


Aluminy said this week Russia was taking "a forced pause" in making cuts because it was not happy with other producers' cuts. But Western delegates said they were pleased with progress, and have high expectations for Ottawa.