Rusal’s bauxite production down by 11.2% in Q1 2020; Alumina output drops by 1.8%

Rusal has launched the first-quarter production results of 2020, wherein it posted that its bauxite output decreased by 11.2 per cent from the previous quarter to stand at 3.58 million tonnes, attributing to to the suspension of operations of business in Guyana, as announced at the beginning of February 2020. Alumina production also plunged, but lesser than bauxite. Its output stood at 2.01 million tonnes after declining by 1.8 per cent from Q4 2019. The Company’s Russian operations accounted for 35 per cent of the total alumina output.

Rusal's aluminium production came in at nearly 940,000 tonnes in Q1 2020, down 0.9 per cent from Q4 2019. The company's Siberian smelters represented 93 per cent of total aluminium output in the said period. Aluminium sales amounted to 914,000 tonnes, lower by 17.4 per cent quarter-on-quarter. The global demand for primary aluminium has been found to record a drop of 6.4 per cent quarter-on-quarter to 14.43 million tonnes in Q1 2020.

The average aluminium realised price decreased by 0.5 per cent in Q1 2020 to stand at US$ 1,864 per tonne.

Going ahead, however, the primary aluminium is expected to gain some share from scrap this year, given that the current price trend is preferential for the former over the latter.

The overall global aluminium market this year is likely to experience a weaker consumer demand amidst greater supply surplus, as a result of the adverse impact of COVID19.

Aluminium end-user demand from transport and construction to packaging and consumer industries is expected to decrease as well, with the plunge in the end-user production.

Commenting on the first-quarter results, Evgenii Nikitin, CEO of RUSAL, said: “Today we all live in a new paradigm, where we face a new challenging and unpredictable situation. The impact that these challenges, caused by the pandemic, will have on the economy is yet to be evaluated, but it will certainly affect all industries, including the aluminium market. It is not too early to predict that the spread of the coronavirus could considerably decrease the aluminium demand and deteriorate business conditions across all regions."

He also said, "Despite the economic turbulence during the first three months of the year, RUSAL is demonstrating a robust performance thanks to a highly skilled and flexible management team. RUSAL’s total aluminium sales in the first quarter of 2020 decreased by 17.4% compared to the fourth quarter 2019, but this was due to the high base effect, after high level of sales during the last three months of the past year. However, sales increased by 2.0%, compared to the same period the previous year. Also, the total sales mix has value added products’ share of 46%, almost reaching the level registered in 2017, before the OFAC Sanctions."