TOKYO (Reuters) - Japan’s LIXIL Group is worried about volatile aluminum prices in light of the U.S. trade actions, including imposing sanctions on United Company Rusal, although it is not concerned about procuring the metal, its chief executive officer said on Monday.
Aluminium prices have swung sharply since the United States, in response to what it called “malign activity” by Russia, on April 6 imposed sanctions on 24 Russians, including metal tycoon Oleg Deripaska and a number of his companies, including Rusal, one of the world’s biggest aluminum producers.
LIXIL, which makes aluminum sash windows and buys about 160,000 tonnes of the metal as raw material a year, expects aluminum prices to rise to 250,000 yen ($2,289) per tonne in the financial year to March 2019 from 234,000 yen a year earlier.
“We don’t expect aluminum prices to fall this year,” LIXIL CEO Kinya Seto told an earnings briefing on Monday.
“We are not worried about securing the supply as we don’t buy the metal from Rusal that much, but we are worried about volatile aluminum prices,” he said.
U.S. aluminum premiums - the cost on top of futures prices to obtain physical metal - have more than doubled since January in response to U.S. tariffs on aluminum imports.
U.S. President Donald Trump in March announced a 10 percent tariff on aluminum imports to counter what he has described as unfair international competition.
Japanese aluminum premiums for the second quarter rose 25 percent from the first quarter to the highest in three years, reflecting surging spot premiums in the United States.
($1 = 109.2300 yen)
Reporting by Yuka Obayashi; Editing by Christian Schmollinger
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