HAMBURG - Novelis Europe, a unit of the world's largest producer of rolled aluminium products Novelis, says it will again exclude Russian aluminium from its 2024 metal supply tender.
Russian metal is again in focus as the industry goes into the so-called mating season when consumers, producers and traders agree deals to buy and sell aluminium for 2024.
Novelis still buys some aluminium from Russia's Rusal, under contracts agreed before Russia invaded Ukraine last year, but since then it has shunned new deals for Russian aluminium, the US-based company's CEO said in August.
"Novelis Europe has been fulfilling some remaining contractual obligations with Russian aluminium suppliers,” Emilio Braghi, executive vice president and president of Novelis Europe, told Reuters.
“We are excluding Russian sources in our 2024 tender to supply aluminium to our Novelis plants in Europe,” he said during an interview marking the London Metals Exchange industry gathering known as LME Week.
Currently there are no sanctions on Russian metal, but many consumers will not buy aluminium produced by Rusal which accounts for 6% of global mined production.
Owned by India's Hindalco Industries, Novelis is also the world's largest aluminium recycler with production and recycling operations across Europe.
Moves to reduce plastic packaging for environmental protection are increasing demand for aluminium packaging.
“We continue to see a trend towards aluminium beverage packaging, especially (for) beer and carbonated soft drinks,” Braghi said. “The popularity of energy drinks and ready-to-drink cocktails in cans is rising.”
More packaging legislation in some countries and changing consumer behaviour away from plastic support the shift towards aluminium cans, he said.
“The continued growth trend for electric vehicles is driving aluminium sales. In the aerospace sector, the strong recovery continues after the COVID-related downturn," he added.
"Our production sites are running close to full utilization except the assets serving the building and construction segment which is currently impacted by high interest rates, increased labour costs and general supply constraints which lead to market uncertainty."
Aluminium production cuts in Europe last year due to high energy costs have also not been reversed.
“From a short-term view, the smelting curtailments in Europe cause a shift to higher imports of aluminium, despite the moderate demand situation,” Braghi added.