(Adds Rusal declining to comment)
By Pratima Desai and Dmitry Zhdannikov
LONDON, May 23 (Reuters) - United Company Rusal resumed shipping aluminium to some customers last week following an extension of the deadline for companies to wind down contracts with the Russian firm under U.S. sanctions, sources said.
The U.S. Treasury Department moved its deadline for U.S. consumers to wind down business with Rusal to Oct. 23 from June 5 previously and said it would consider lifting sanctions if Rusal’s major shareholder, Russian tycoon Oleg Deripaska, ceded control of the company.
“Aluminum is being shipped. Parties who have existing contracts are starting to take deliveries,” a metal industry source said.
Sources say aluminium had been trickling out, but the quantities now being talked about were substantial, however they declined to disclose any specific numbers.
Rusal declined to comment.
Some customers had asked Rusal after the sanctions were imposed on April 6. to stop shipping metal until their legal and compliance teams had confirmed their contracts allowed them to take Rusal’s aluminium until Oct 23, sources said.
“Rusal’s customers need to restock to meet their obligations. It’s a slow process, but it has started,” an industry source said, adding that lobbying by U.S. consumers could mean the deadline was extended beyond October.
Sources said uncertainty about aluminium supplies supports prices, which at around $2,250 a tonne are up more than 10 percent since April 6.
A source at one of the railway operators involved with Rusal’s exports said last Friday that the company was preparing to resume significant supplies very soon.
The extension detailed in General Licence 14 (GL-14), issued late April, effectively means aluminium produced and sold by Rusal until Oct. 23 is free of U.S. sanctions, so long as the deal to buy was signed before they were imposed.
Existing deals include those such as Swiss-based mining giant Glencore’s seven-year deal to buy 14.5 million tonnes of aluminium from Rusal between 2012 to 2018.
Sources say, stock movement in warehouses approved by the London Metal Exchange suggest nervousness about supplies of primary aluminium may be receding, even if only temporarily.
“Aluminium taken off LME warrant in Malaysia to meet contractual obligations, to cover potential shortfalls in commitments is starting to be re-warranted,” an industry source said. “Anxiety seems to be fading.”
Stocks of aluminium in Port Klang, Malaysia fell below 303,000 tonnes in the middle of May, down more than 20 percent since early April. They are now around 316,000 tonnes.
Total stocks of aluminium in LME registered warehouses at above 1.23 million tonnes are down more than 10 percent since the extension was announced.
Rusal’s metal has been suspended from the LME’s list of approved brands that can be delivered against its primary aluminium contract since April 17.
It accounted for more than six percent of global aluminium supplies estimated at around 63 million tonnes last year. (Reporting by Pratima Desai and Dmitry Zhdannikov Additional reporting by Gleb Stolyarov and Polina Devitt; Editing by Veronica Brown and Alexandra Hudson)