Rusal eyes further aluminium production cuts

Russian aluminium producer Rusal said it is considering further production cuts and won’t restart idled smelters, as prices for the lightweight metal trade close to their lowest levels since 2009.

The company, controlled by Oleg Deripaska, said it would consider cuts of around 200,000 tonnes per year, writes Henry Sanderson, Commodities Correspondent.

The global aluminium market is suffering from a glut of the metal from China, which rapidly built out its production over the last decade. China is likely to add an extra 3m tonnes of new capacity this year and close around 1.5m tonnes, Rusal said. That is a slower growth rate than the last five years, it said.

Along with closures outside China Rusal said it expects a 1.2m tonnes market deficit in 2016 compared to a slight surplus last year.

Still, it cautioned that any price upside in the short-term will be “dependent on FX rates, underlying energy prices and the positioning of commodity funds based on their views of the Chinese economy.”

Rusal’s shares fell 2.61 per cent in Hong Kong. They have fallen 63 per cent over the past year.

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