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Rusal may sell Armenia-produced aluminum in Europe
Russian UC Rusal, the world's largest aluminum producing company, is able to restructure its logistics in order to sell in Europe the foil produced by its Armenian subsidiary ArmenAl if the European Commission moves to set a 34% duty on imports of Russian aluminum , head of Rusal packaging department Sergey Goryachev said.
Russian newspaper Vedomosti said a representative of the European Commission did not comment on the company's plans.
Earlier this the European Commission initiated an anti-dumping investigation against Russian foil, introducing late last week a preliminary duty of 12.2%, which will be effective throughout the investigation. If the investigation tracks down a dumping component in the prices of Russian foil producers, the import duty on Russian foil will be set at 34%, according to EU's Official Journal.
The foil currently sold by Rusal to Europe is produced by its enterprises Ural Foil and Sayan Foil. "Last year Rusal produced 88,000 tons of aluminum foil, earning the company $303 million or 3.2% of its total revenue; about a third of this amount comes from exports to Europe and as much from sales in the US and within Russia itself. Rusal's sales in Europe amount to 24,000 tons per year, while the total consumption in the Continent is 800,000 tons. In the US, the situation is symmetrical," said Goryachev.
The European Union launched the investigation at the end of last year on the complaint of five European foil producers. The provisional duty is imposed on aluminum foil from 0.008 to 0.018 mm in rolls no more than 650 mm wide weighing 10 kg, according to the EU's Official Journal.
"Europe is trying to close its markets and to protect its own aluminum producers,' said RMG analyst Andrei Tretelnikov.
"EU's measure has affected about 80% of what we export to Europe," said Goryachev. If a 34% duty is introduced, and Rusal will not restructure its logistics and sell in Europe the output of its Armenian subsidiary ArmenAl, revenue shortfall will be about $30 million a year,' according to Tretelnikov's estimate.
UC Rusal will work together with the EU to prove that there is no dumping prices, said Goryachev.
Rusal has increased the capacity of Armenal from 25,000 to 33 000 tons of foil a year, said Goryachev. If higher duty is imposed Rusal will have to sell its products within Russia, where the annual consumption is less than 50,000 tons per year and Rusal accounts for about 45-50% of sales, while the rest is imported.
Source: ARKA News Agency