Agreement to cut production was reached after Russian concessions on Saturday, but Moscow wants guarantees of open markets for its exports and financial assistance in return.
In a terse statement yesterday the European Commission announced agreement but gave few details. The deal was based on a memorandum of understanding reached after a conference in Brussels on 18-21 January between Russia, Norway, the US, the EU, Australia and Canada.
Aluminium prices have tumbled from more than dollars 2,000 to nearer dollars 1,000 a tonne over the past three years as oversupply, largely the result of Russian exports, caused a glut on world markets.
But it is uncertain whether the new arrangement will lead to production cuts sufficient to allow prices to return to more normal levels. Prices have already firmed on expectations of a deal.
Russia said on Saturday that it would cut production by 500,000 tonnes. But it is understood to have said that, in exchange, it wanted guarantees that EU import curbs would be dropped, an end to action against imports in the US, cuts by other exporters and aid for Russian industry.
Industry sources say that overproduction amounts to between 1.5 and 2 million tonnes, about 10 per cent of current production.
Russian exports totalled 300,000 tonnes in 1990, and climbed to 1.6 million tonnes in 1993 as demand from the military-industrial complex slipped.Reuse content