Rusal witnesses lowest aluminium output in 8 years as smelters shut

United Co. Rusal, the largest aluminium producer in the world, plans to cut down output to a minimum in the coming eight years as it will be shutting down inefficient smelters.

It is expected production will be around 3.5 million metric tons in 2014, the company said on Tuesday to the Hong Kong stock exchange, down by 10% output in 2013.

Rising electricity costs as well as low aluminium prices are disappointing producers and a cut down of 3 million tons of aluminium capacity by 2015, Bloomberg Industries said.

Alcoa Inc., the largest aluminum producer in U.S, said it had close down a smelter as well as mills in Australia in order to cut down the annual capacity by 5% to 3.8 million tons.

Aluminum prices went up for a fifth time in 6 days after Rusal and Alcoa’s statements.

Aluminum for delivery in 3 months on the LME touched $1,671.25 on 3 Feb, the lowest since 2009 August. Aluminium prices have gone down by 18% last year.

According to Rusal, aluminum output declined 8% last year to 3.9 million tons as it had cut down the production in Nigeria and Russia. Alumina production went down 2% to 7.3 million tons.

Global consumption of aluminium gained 6% last year to 51.7 million tons, while China’s demand increased 13%, Rusal said. Global demand for the metal will increase 6% in 2013 as the transport sector supports demand in markets including North America and Thailand, it said.