Credit: REUTERS/ILYA NAYMUSHINBy Tom Daly
BEIJING, Aug 26 (Reuters) - United Company Rusal 0486.HK has decided to pull out of an aluminium trading joint venture in southern China, partly due to concerns over the low volumes it has been selling, three sources with knowledge of the matter said.
Separately, the Russian firm is setting up a new office in Shanghai to boost its marketing presence in China, the world's biggest aluminium market, a Rusal spokeswoman said.
Rusal is negotiating the sale of its stake in North United Aluminium (Shenzhen) to state-run partner China North Industries Group Corp Ltd (Norinco), said the sources, who declined to be named as the information is not public.
Rusal invested in North United Aluminium in 2012 but has grown disappointed with the low volumes traded, the sources said, with one noting the arbitrage to ship Russian aluminium to China opens "once every blue moon".
Opening the Shanghai office is part of Rusal's strategy to increase sales in Asia and market low-carbon alumininum, the company's spokeswoman said, without commenting on the joint venture.
Aluminium production is energy intensive and Rusal uses hydro power, which is cleaner than other energy sources.
Norinco and North United Aluminium did not respond to requests for comment.
A rebound in Chinese demand after the coronavirus outbreak pushed the arb wide open this year, however, sending aluminium flows into China to their highest since 2009.
By managing its own selling Rusal will not have to split the profit on any import deals, sources with knowledge of its plans said.
Rusal is seeking an aluminium sales manager and business development manager in Shanghai, job ads posted this month on website Glassdoor.com show. Other positions advertised are for a traffic operator and a technical product manager.
The hirings revive plans Rusal had for a Shanghai office two years ago when it faced U.S. sanctions but ultimately only set up a trading unit in Beijing.
Asia accounted for 27% of Rusal's aluminium sales in April to June, up from 15% in the first quarter, lifted by arbitrage sales to China.
Blue moon opportunityhttps://tmsnrt.rs/32poEjO
(Reporting by Tom Daly; additional reporting by Polina Ivanova in Moscow; editing by Shivani Singh and Mark Potter and Kirsten Donovan)
((tom.daly@thomsonreuters.com; +86 10 5669 2119;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
