BHP Billiton, Rio Tinto, Alcoa and Rusal in Japan: A New Thanksgiving


“The latest quarterly pricing negotiations are expected to begin [this] week between Japanese buyers and miners including Rusal, Rio Tinto Ltd , Alcoa Inc and BHP Billiton, and are expected to continue to next month… Rusal, the world’s biggest aluminium producer, said it had offered January-March shipments of the metal to Japanese buyers at a premium of $270 per tonne, seeking a record high.” -Reuters 

Scene: The docks at the Japanese port of Yokohama, where a gigantic oceanworthy yacht named RUSLANA has come to rest. Four executives spill out, led by Andrew Mackenzie, CEO of BHP Billiton, then Sam Walsh, CEO of Rio Tinto, Klaus Kleinfeld, CEO of Alcoa, and finally Oleg Deripaska, CEO of Rusal, the yacht’s owner. They are met by a group of Japanese metal buyers.

Japanese Buyer 1: Konnichiwa! Welcome to Nihon. So glad you all could make negotiations in person.

Deripaska: Ach! Don’t mention it. How better to get back in touch with our favorite buyers than in person!

Kleinfeld: Besides, we all needed to get out of the house!

Mackenzie: We just wanted to try out the RUSLANA, Oleg here’s been talking it up – she plies the seas rather well.

Deripaska: I spare no expense, Andy! But our navigation must have been off, we were aiming for the Port of Tokyo and instead we ended up here…

Japanese Buyer 2: To be honest, gentlemen, we weren’t expecting you, but rather, your representatives.

Deripaska: Nonsense, nonsense…we’re happy to be here. I can’t speak for these other guys, but I spend every minute of my working hours thinking nonstop about my company’s Japanese clients and how much they mean to Rusal, whether I’m shopping in New York or dining in London or…

Walsh: Have you stepped foot in this land before, Oleg?

(A beat.)

Japanese Buyer 1: We believe you, Mr. Deripaska. We’re at your service, here to help. It’s just that…well…we heard that you wanted to up the Q1 2014 aluminum premiums on us.

Japanese Buyer 2: Sources told us that it would run somewhere around $270 per ton…

Kleinfeld: Oh boy.

(Mackenzie and Walsh begin wandering down the dock.)

Weeks upon weeks go by, and it turns out the negotiations were unexpectedly brutal – the CEOs weren’t sure they were going to make it. The Japanese buyers withheld martinis, scotch and caviar, trying to persuade their suppliers to give them a break. Only half the original team survived – the raw material mongers Mackenzie and Walsh couldn’t hang on…and ended up taking private jets back to the West. Then, finally, a breakthrough: another Japanese buyer (we’ll call him “3”) cut through the fog and showed Deripaska the way to the promised land.

Scene: A sleek conference room in the Toyko Park Hyatt.

Japanese Buyer 3: See? We hit on the best solution for all sides. You get to salvage some your profit margin and we avoid $270-per-ton premiums – win-win.

Deripaska: Oy bozhe, spasiba! You’re a lifesaver!

Japanese Buyer 1: Now, let’s feast – Nihon-style!

Kleinfeld: Can we hit up Sukiyabashi Jiro? I’ve always wanted to meet Jiro Ono. Hope he’s still alive.

Deripaska: Oh, I loved that film.

Japanese Buyer 2: Toro for everyone!

Deripaska: It’s on me!

Thus, buyer helps seller, seller repays buyer, and fatty tuna becomes the centerpiece of this New Thanksgiving.

So what actually happened during the negotiations? How did Japanese aluminum buyers avoid higher premiums? Leave a comment below with your ideas! And for more Thanksgiving reading, don’t miss the following FREE downloads:

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  • Of course back at KAOS headquarters, Blankfein and Glasenberg watch the whole process on a hologram projection with 4D surround sound .
    As the premiums are locked-in, Blankfein and Glasenberg give out their orders.
    Power stations across China are hit by cyber attack – destroying turbines and burning boilers to the ground.
    Sea lanes from the gulf are closed as missiles are fired from either sides of teh straits of Hormuz in a ‘terrorist triggered’ conflagration bringing Oman, UAE and Iran to war, stranding metal in the gulf.
    And an army of gray suited ‘metaltroopers’ emerge onto their LME listed stock-yards and spirit away the worlds surplus of metal to a gigantic sub-sea cavern, the final step in stealing the aluminium from naieve retail, banking and institutional investors.
    Finally they ensure that on top of healthy premiums that the LME at last starts increasing, and their investments in Rio, Rusal, Alcoa, Century spiral upwards in value.

    HaHaHa!! And Deripaska thinks he has a nice boat 😉


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