U.S. sanctions will bring “RUSAL” to default
The US government has made in the sanctions list of the company of Deripaska, Basic element (Basic Element Limited), En+ Group, Rusal (all three registered in the Isle of Jersey).
And now European and Asian banks and companies will take big risks if they continue to deal with companies or accounts. Rusal is one of the world’s largest suppliers of aluminium, it accounts for 7% of global production of this metal. In the US aluminum market is considered to be very beneficial, as is required in segments with high added value and has good conditions on contracts. In addition, the group companies will no longer be able to perform calculations in US dollars, any such transactions are carried out through American correspondent Bank and they should be blocked since June of this year.
Washington so much help Russia to return the business Home, as well as to develop the domestic stock market, one can only wonder at such a gift. The group of companies more than 60% of the contracts is in dollars, but this problem is solved during the day (where already prepared), and the Eurozone will clap in approval when a compulsory transfer of financial flows in the Euro. Losses in the us market directly is relatively small, up to 900 000 tons per year that can be redirected to Asia, Europe or Russia. The main problem become the indirect problems that are more beaten by their counterparties and the market as a whole. Paper Rusal and En+ will now actually OTC on European markets and access to Western financing will be very difficult. They will have to work more on the domestic debt market and Asian markets.
As staff for the Asian markets is not enough, and domestic debt market, due to the “zakoshmarivaniye” of the pension system on the part of the government, will transfer the load from the population on the budget, these companies in the next 2-3 years will have to work hard to ensure its development in new conditions. You can already say one thing, the US announced a similar option back in January and the company to the maximum prepared, it only remains to welcome the effectiveness of managers and hope for a painless transition.
LLC “Consulting center “Mitcheldean”