Aluminium deal structuring
Primary aluminium on a direct contract with the producer, delivered where the buyer needs it — not only at the load port.
Only goods of non-sanctioned origin. Sanctions screening of all parties is mandatory.
The deal from the buyer’s side
For a buyer of primary aluminium the question is rarely the metal itself. It is who stands behind the offer, and whether the contract can be signed directly with the producer rather than through a chain of resellers. Every intermediary in a chain adds a margin and a risk, and the buyer should see the figure that is left after all of them, not the one in the offer.
The buyer’s bank reads the same file from another angle: a counterparty it can verify, a contract that matches the letter of credit, and documents that will actually be presented. If any of these is unclear, the bank asks its questions before it issues anything.
Many buyers do not want metal at the load port. They need it at their own port, cleared and insured. In those cases we have structured the deal as a joint venture with an investor: the investor’s capital buys the metal FOB, the freight, insurance and delivery leg is set up and run inside the venture, and the proceeds go to the investor’s accounts and are distributed under the venture terms.
What we check at the seller
That the seller is the producer or holds a direct contract with it, not one more link in a resale chain.
Registration, ownership and the signatory's authority: first in open registries and news, then through the seller's bank, with the seller's written authority to verify.
Origin and producer, checked against the sanctions and exchange rules in force on the date of the deal, and sanctions screening of every party and vessel.
Evidence that the metal and the volume are available for this contract.
Any request for money from the buyer before a contract exists. That ends the conversation.
Typical structure
Delivery basis
FOB at the load port when the buyer takes over from there. When the buyer needs the metal at its own port, cleared and insured, the freight and insurance leg is built into the structure, for example inside a joint venture with an investor.
Payment instrument
A documentary letter of credit or SBLC from the buyer's bank under UCP 600. The seller's performance bond follows once the instrument has been received and checked.
Inspection
Independent inspection of quantity and quality at loading, with certificates worded the way the letter of credit requires.
Document route, step by step
Seller's documents to us
Corporate documents, the offer and the product documents come to us first. The buyer receives a checked file, not raw paperwork.
Contract
Buyer and producer agree the contract: delivery basis, inspection, and the documents the letter of credit will ask for.
Letter of credit
The buyer's bank issues the letter of credit or SBLC. The seller receives it and checks the terms.
Performance bond
After checking the instrument, the seller issues a performance bond. It cannot come first: it is a percentage of an instrument that does not exist yet.
Loading and inspection
The metal is loaded and inspected. Inspection certificates, the bill of lading and the commercial invoice are issued.
Presentation and payment
Documents are presented under the letter of credit and paid against compliance. Money moves after documents, not before.
Where these deals stall
- —The offer comes from a reseller several links away from the producer, and nobody can show the chain.
- —The buyer needs the metal at its port, the offer is FOB only, and nobody has arranged freight and insurance.
- —By the time the file reaches the producer, the ICPO has expired or is addressed to another company.
- —The seller is asked to agree the performance bond before the letter of credit exists.
- —The file sits on KYC because the buyer's documents are incomplete.
Checklists by deal step
Have a deal in this commodity?
Send us the offer or the structure. We reply within two business days.