Glencore, the world's largest commodities trader, has also been involved and is re-examining its business relationship with Russia as the impact of the war between Russia and Ukraine continues to simmer in global commodity markets.
At present, LME aluminum prices are already at a record high, and Glencore's assessment of its Russian operations is likely to further increase volatility in the aluminum market.
Glencore: evaluating its business in Russia
Since the weekend, western governments have stepped up sanctions against Russia and put pressure on companies to sever ties with Russia.
Previously, including Apple, Boeing, BP, Shell,
Dozens of Western companies, including ExxonMobil and Statoil, have stopped doing business in Russia or announced plans to abandon their Russian operations.
Although Glencore has not announced an exit from its investment, Glencore said it was reviewing its stakes in Russia's two largest companies, as well as its trading business in Russia.
Glencore currently owns 10.55 per cent of En+ Group International PJSC, which is the controlling shareholder of Rusal. Glencore also has a small stake of less than 1 per cent in Rosneft PJSC, the Russian oil giant. Glencore reported last month that the fair values of the two investments were $789 million and $485 million, respectively, by the end of 2021.
"We have no business footprint in Russia and our trading exposure [in Russia] is not important to Glencore," the company said in a statement. We are evaluating all our business activities in the country, including our stakes in En+ and Rosneft. "
Compared with other western companies, Glencore's statement is particularly noteworthy. Russia has always been one of Glencore's important suppliers of bulk resources, especially Rusal has been Glencore's long-term partner in the aluminum industry. Ivan Glasenberg (Ivan Glasenberg), a former CEO of Glencore and now the second-largest shareholder, was a member of Rusal's board of directors until 2018.
In 2020, Rusal and Glencore signed a long-term supply contract worth more than $16 billion, covering nearly 1x3 of Rusal's total production capacity. Under the agreement, Rusal will start supplying aluminum to Glencore from 2020, which will last until 2024 and can be extended to 2025.
In addition, Glencore bought some oil from Rosneft, but did not publicly disclose its trading volume.
At present, the war between Russia and Ukraine has affected a number of major asset prices around the world, both aluminum prices and international oil prices have reached a new high. If Glencore is considering withdrawing its stake in Russian companies or interrupting supply relations with Russian companies, or further exacerbating the volatility of the bulk market.
