Rusal, the biggest aluminium producer, is setting premiums for its metal on a monthly basis instead of annually as in previous years to more closely link the payments it gets to market movements.
"Rusal switched more than half of its contracts to floating premiums starting from this year," strategy director Oleg Mukhamedshin said.
Customers should also hedge against price gains or "they may miss the right moment to hedge and lose money", he said.
European premiums, which buyers pay on top of London Metal Exchange prices to get supplies of the metal straight away, have more than doubled to US$217.50 a tonne, excluding duty, from the start of last year. Aluminium gained 5 per cent in the same period.
Rusal saw the market in balance this year, Mukhamedshin said. "Premiums won't be increasing significantly this year but they won't be declining either," he said.
Rusal sets monthly rates based on a combination of average LME prices and average prices plus the premium from the prior month.
