20 January 2017

Rusal’s Deripaska Skeptical of Market’s Post-Trump Optimism

The mood among the world’s economic elite here is upbeat—after all, rising stock markets and the prospect of lower taxes and lighter regulation mean the rich get richer.

Russian businessman Oleg Deripaska, the president of United Co. Rusal PLC, isn’t so cheery. “We have uncertainties again about the U.S. Who knows what the new administration will do?” Mr. Deripaska said in an interview with The Wall Street Journal on the sidelines of the gathering of the World Economic Forum. “I don’t know how people could be so bullish, based on this situation, that the Fed will increase rates.”

He said he has “no idea” whether the incoming administration of President-elect Donald Trump will improve frosty U.S.-Russia relations, as Mr. Trump has made plain he would try to do.


Mr. Deripaska said Russian private businesses and the U.S. have a “very friendly” relationship, but added the U.S. State Department during the Obama administration did “a lot of things just to make Russia isolated.” Mr. Trump’s secretary of state pick, former Exxon Mobil chief Rex Tillerson, has long business experience in Russia.

“The reality is the first thing which should be softened is the Russia-Europe relationship, and Germany must really define what they want,” Mr. Deripaska said. He said he is more concerned about the German election this year than Mr. Trump’s new administration.

Rusal, an aluminum giant, competes with low-cost producers in China, and Mr. Deripaska has long complained that his Chinese rivals enjoy state benefits and subsidies—among them lax loans from state-owned banks—that make their prices unfairly low.

He said the rest of the world is too complacent about the pace of China’s overhaul of its financial system. “There is not much progress done, but people seem relaxed,” he said.

Mr. Deripaska said he was watching Zhongwang USA LLC’s planned purchase of Cleveland-based Aleris Corp. for $1.1 billion. Zhongwang USA is an affiliate of China Zhongwang Holdings Ltd., a giant aluminum maker. The Aleris deal is its “window” into the U.S., Mr. Deripaska said. Some of China Zhongwang’s trade practices, including whether it evaded import restrictions, are being probed by U.S. officials. China Zhongwang says it has done nothing wrong.

Mr. Deripaska also doesn’t think that the deal reached by Organization of the Petroleum Exporting Countries and non-OPEC producers, including Russia, to cut crude oil output will hold. “It’s impossible,” Mr. Deripaska said of compliance. With the oil price about $50, it is too tempting and “there are so many opportunities” for producers to boost output and benefit from the higher price. “We’re not betting oil will go up. We’re not hedging at this level,” he said. “We believe it will be $40 to $50.”

By CHARLES FORELLE and ELENA CHERNEY

The Wall Street Journal, 20.01.2017

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