Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Russian Smelters Quit Alumina Talks

Unable to agree on a price for alumina, two giant Russian aluminum smelters have broken off talks with Ukraine's biggest alumina supplier, senior Russian officials said Thursday.


The Siberian Bratsk and Krasnoyarsk smelters said the Mykolayiv alumina plant in southern Ukraine was asking for too much money, and that they would seek raw material suppliers outside the Commonwealth of Independent States.


"Unfortunately we cannot agree on the price, and their [Mykolayiv's] price is higher than world prices," said Yury Shlaifshtein, a board member at the world's largest aluminum smelter Bratsk.


"We say now we will buy alumina outside the CIS. There it is much cheaper," said Gennady Druzhinin, board chairman at Krasnoyarsk, the world's second biggest plant.


But a representative of the Ukrainian firm said the Russians' comments were part of an effort to make it drop its metal prices.


"All of these comments are being made with the goal of influencing our actions and forcing us to sell our product at a lower price," said Valery Agafonov, the plant's financial director.


Alumina is a raw material used in producing refined aluminum.


Shlaifshtein said the gap between buyer and seller was between $35 and $40 per metric ton, but would not elaborate on outright prices. He said Mykolayiv's prices were inflated by high production costs and an overall lack of competitiveness.


But he also said Bratsk may renew talks in March.


"We do not plan to renew negotiations before the beginning of March," he said.


World prices have firmed lately to around $185 a metric ton from $145 in the third quarter last year, Macquarie Equities said in a recent report.


Russia, chronically short of supplies of alumina, has been seeking supply contracts from the Mykolayiv plant with an eye to securing nearby raw materials at low prices.


Both Bratsk and Krasnoyarsk said they have covered most of their alumina requirements for 1997, although some purchases still need to be made.