American Metal Market: Weary aluminum remains bit wary; Russian roulette keeps spinning

NEW YORK -- The Western aluminum industry isn't exactly awash with enthusiasm yet despite government-level talks about the unfolding crisis on the international aluminum market.

On this side of the Atlantic, the U.S. aluminum industry, speaking through the Washington-based Aluminum Association, this week "applauded the U.S. government for its leadership" after last week's government-level huddles in Moscow.

At the same time on the other side of the Atlantic, where the European Commission has at least temporarily throttled the flow of aluminum from Russia and other points in the Commonwealth of Independent States to European Community consumers, EC sources where saying a bilateral arrangement was possible before the EC quota expires Nov. 30.

The U.S. target, however, is a multilateral agreement. The aluminum industries in the United States and Canada (still far and away the biggest exporter of aluminum to the U.S. market) have been watching more Russian aluminum flow around the EC barrier since it went up last August and head for these shores. The North American argument focuses on the impact of excess supplies on the aluminum price structure.

However optimistic the EC sources might have been Wednesday on chances for a bilateral aluminum trade agreement, they were unable to say the two parties were close to agreement on how much Russian aluminum would be allowed in EC markets.

The Aluminum Association late Wednesday said it "applauded the U.S. government for its leadership in the first round of multilateral negotiations...to resolve the surge of Russian aluminum export into Western markets." Association president David Parker said the industry "is pleased with the progress of our government's efforts in this issue."

U.S. trade representatives went to Moscow last week on the Russian government's invitation to discuss an agenda for an international aluminum conference, but an association spokesman said the U.S. government played a role "in bringing the Russians to the table" and that it was forceful in presenting the U.S. side.

The association said the U.S. negotiators said the Moscow meeting "discussed options to control the flow of metal coming from the CIS" and that the parties agreed to another government-level meeting in Washington.

Parker said the U.S. aluminum industry "opposes the bilateral agreement which the EC is pursuing with Russia" and that the association "will continue to work with our government to prepare for the December meetings."