The expert predicted a shortage in the global auto parts market

The hope of Japanese manufacturers for Russian aluminum may not be justified, and Rusal will not be able to capitalize on the situation in the Middle East, experts interviewed by Izvestia believe.

Amid the escalating conflict in the Middle East, where more than 10% of the world's aluminum is produced, Bloomberg reported interest in Russian aluminum from Japanese and Korean automakers who had previously rejected it. However, Boris Kopeikin, chief economist at the Stolypin Institute of Growth Economics, believes that it will hardly be possible to return to the old paradigm and "earn as before."

"Previously disrupted supply chains are not instantly restored, even with the strong desire of all participants. And it's not just about geopolitical factors, but also purely business factors. So there is a serious shortage in the market of automotive components made from aluminum," the expert explained.

Kopeikin noted that automakers' requests are "often specific." "The alloys they need are not produced instantly, and no one keeps such products in warehouses. This is not oil and gas, which are pumped from the depths either directly to refiners or to storage facilities, and there are many more suppliers in the world than low—carbon aluminum," he added.

Leonid Khazanov, an independent industrial expert, agrees with him. In his opinion, Rusal, due to the peculiarities of its production and marketing, cannot quickly meet the unexpected demand for aluminum and take advantage of the market conditions to increase its revenues.

"The fact is that Rusal exports not just primary metal in pellets, but alloys for the needs of auto parts manufacturers and other consumers. These are customized products that are manufactured to specific specifications," Khazanov said. Rusal could dramatically expand shipments of aluminum alloys in only two ways — by refusing to supply them to existing customers or by selling off the leftovers from warehouses, the expert noted.

"However, the company traditionally operates under long-term contracts. Judging by the available data, it has significantly reduced warehouses since the beginning of last year, and the company's order portfolio has been formed at least six months in advance against the background of the reorientation of sales to friendly countries. The time between receiving an order for an alloy and its arrival at the warehouse for customers usually takes at least 3 months," Khazanov added.

Even "if by some miracle" reserves are found to increase production, the products still need to be delivered to the buyer, Kopeikin stressed. He noted that this would at least take time, not to mention "a lot of logistical and sanctions restrictions."

The expert recalled that there was a certain shortage of supply and rising prices on the world market, and before the outbreak of the conflict, there was no increase in the production of "winged metal" in the United States. At the same time, Russian aluminum, as well as the Middle East, has a low carbon footprint, which is becoming an increasingly important factor in certain industries and in a number of markets, Kopeikin added.

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