28 MAY 2013Themoscowtimes.com
Rusal sees room for more cuts as aluminum price struggles
Edited by : AL CIRCLE
2 min read
Aluminum giant Rusal could consider deeper capacity cuts if prices for the metal continue to languish around levels last seen in the aftermath of the financial crisis, a senior executive said.
The aluminum industry is struggling with excess capacity, rising costs and weak prices. RusAl estimates a fifth of global production outside China is loss-making, even with demand expected to grow 6 to 7 percent in 2013.
Last year, the company promised to slash 300,000 tons of capacity, a 7 percent drop, and production dropped 4 percent in the first quarter of this year. But rival Alcoa said this month it could shut down as much as another 11 percent of smelting capacity, 460,000 tons, to remain competitive.
"There is a decision already, supported by our board of directors, and it is 7 percent from last year's production. If more reduction cuts are needed, we will go back to the board."
Deputy Chief Executive Oleg Mukhamedshin said there were signs the new Chinese government would tackle concerns about overcapacity and high-cost smelters, closing down production in a country where almost a third of production operates at a loss.
The availability of bauxite could also become a problem after 2014, when Indonesia terminates exports of ore to try and encourage processing at home.
The aluminum industry is struggling with excess capacity, rising costs and weak prices. RusAl estimates a fifth of global production outside China is loss-making, even with demand expected to grow 6 to 7 percent in 2013.
Last year, the company promised to slash 300,000 tons of capacity, a 7 percent drop, and production dropped 4 percent in the first quarter of this year. But rival Alcoa said this month it could shut down as much as another 11 percent of smelting capacity, 460,000 tons, to remain competitive.
"There is a decision already, supported by our board of directors, and it is 7 percent from last year's production. If more reduction cuts are needed, we will go back to the board."
Deputy Chief Executive Oleg Mukhamedshin said there were signs the new Chinese government would tackle concerns about overcapacity and high-cost smelters, closing down production in a country where almost a third of production operates at a loss.
The availability of bauxite could also become a problem after 2014, when Indonesia terminates exports of ore to try and encourage processing at home.
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