Rusal aims to keep 2016 aluminium output at 2015 level

Russian aluminium giant Rusal Plc expects 2016 production to be in line with 2015, it said on Friday, after reporting signs of improvement in the market.

Rusal, which last year was overtaken by China's Hongqiao as the world's biggest aluminium producer, has been hit by weak prices. It expects output in 2016 to match 2015, when it produced 3.6 million tonnes of aluminium, according to three analysts who listened to Rusal's conference call on Friday.

Rusal officials also told analysts it was still considering a plan to reduce its total output capacity by 200,000 tonnes but has not yet made any decisions.

Earlier on Friday, Rusal reported a 57 percent slump in first-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) compared with the same period a year ago to $312 million. Compared with the previous quarter, however, these core earnings were up 2 percent.

Aluminium prices on the London Metal Exchange (LME) are up about 2 percent since the start of 2016, and Rusal expects 5.3 percent growth in global aluminium demand in 2016 to 59.6 million tonnes. Chinese demand is seen expanding by 7 percent to 31 million tonnes.

"Positive dynamics witnessed in the aluminium sector are supported by an accelerating ex-China deficit and solid demand fundamentals as the transportation sector continues to fuel global demand growth in primary aluminium," Chief Executive Vladislav Soloviev said in a statement. Rusal's shares were flat in Hong Kong on Friday.

On the supply side, Chinese production growth is expected to moderate to 4.8 percent this year, its weakest pace in five years as high-cost smelters were shut down but previously committed expansions came online.

Rusal estimated that out of 4.4 million tonnes of production cuts in 2015 in China, 585,000 tonnes were restarted in the first quarter of this year and 715,000 tonnes were newly commissioned. At the same time, another 604,000 tonnes were idled.