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30 APRIL 2019 AL CIRCLE

Rusal’s Q1 VAP sales drop 44% YoY and 22% QoQ; aluminium sales and production decline too

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

Russian aluminium giant Rusal posted that its first-quarter sales of value added products (VAP) dropped 44 per cent from the contemporary period of the previous year and 22 per cent from the last quarter. Sanctions by the United States are held primarily responsible for this year-on-year and quarter-on-quarter downfall.

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Washington had declared sanctions against the Russian aluminium company in April 2018 and lifted them in January 2019 when co-owner Oleg Deripaska reduced his stake after months of talks and several extensions of the deadline for sanctions to take full effect.

But despite the withdrawal of the sanctions, the company claims its sales of VAP metal - alloyed ingots, slabs, and some other products to have been affected in the first quarter.

Sales of VAP metal decreased to 259,000 tonnes in the first quarter, while the share of their sales in Rusal’s total sales declined to 29 percent from 48 percent in a year ago and 38 percent in the last quarter of 2018.

Rusal said, “As a general rule, the volume of sales is recognised at the time of delivery to the customer. Due to VAP lead times from Russian smelters to the customer’s plant, VAP sales recognised in 1Q19 represent contracts that were serviced towards the end of 4Q18 and at the beginning of 1Q19.”

Besides, Rusal’s aluminium sales and aluminium production also recorded a fall in the first quarter of 2019. Compared with the same period last year, the sales inched down 7 per cent year-on-year to 896,000 tonnes and production by 0.3 per cent to 928,000 tonnes.

Rusal’s average realised price for aluminium dropped too amounting at US$1,949 per tonne, down 7.8 per cent from the previous quarter.

In the opinion of the Russian aluminium giant, these trends will continue to negatively impact the aluminium price globally in the second quarter of 2019, despite the prospect of a potential agreement between China and the US and certain positive economic indicators.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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