Japan's top aluminium rolling company UACJ Corp is removing Rusal from its suppliers list for next year due to uncertainty over U.S. sanction against the Russian aluminium producer, its president said on Thursday.
"Given uncertainty over (the U.S. sanctions against) Rusal, we are removing Rusal for now from the list of suppliers from which we plan to procure aluminium ingots next year," UACJ President Miyuki Ishihara told an earnings news conference. The U.S. Treasury Department in April imposed sanctions against billionaire Oleg Deripaska and eight companies in which he is a large shareholder, including aluminium exporter Rusal, citing "malign activities" by Russia
"But we have secured enough supplies from other sources," Ishihara said. The Japanese manufacturer, which sells products to can makers and automakers among others, is also testing out alumunium produced by other alternative suppliers, he said.
The U.S. Treasury Department in April imposed sanctions against billionaire Oleg Deripaska and eight companies in which he is a large shareholder, including aluminium exporter Rusal, citing "malign activities" by Russia.
The sanctions have been postponed several times since then as the United States considers removing Rusal, the world's second-biggest aluminium producer, from the U.S. blacklist if Deripaska drops his control over the company.
The sanctions deadline has been last extended to Dec. 12.
But Ishihara suggested that UACJ may resume trade with Rusal once the sanctions are lifted.
"We hope to resume procurement from Rusal depending on the sanction's situation," he said.
UACJ reported a 41 percent drop in recurring profit for the April-September period on higher energy costs and a one-off spike in depreciation expense, but stuck to its full-year forecast of a 3 percent profit increase.
Ishihara said the U.S. import tariffs on aluminium, imposed in March, have limited impact on its export as its U.S. export is small and some of its products have been exempted.
But the company is worried that Chinese aluminium supplies that are pushed out from the U.S. market may eventually head to the rest of Asia, including Japan, which could weigh on the metal products prices in the region, Takayoshi Nakano, UACJ's senior managing executive officer, said.
(Reporting by Yuka Obayashi; Editing by Tom Hogue)