LONDON, Dec. 3 -- United Co. Rusal, the world's largest aluminum producer, won't restart shuttered capacity while demand for the lightweight metal is still recovering, owner and Chief Executive Officer Oleg Deripaska said.
"Our policy is very responsible," Deripaska said today in an interview at Bloomberg's London offices. There "will be no restarts," he said.
Rusal and competing aluminum producers Rio Tinto Group and Alcoa Inc. cut output this year after commodity prices slumped as the global economy contracted. Moscow-based Rusal, which is seeking to sell shares in an initial public offering in Hong Kong this month, said in February it would curtail 500,000 metric tons of annual output, or 11 percent of total capacity.
In March, 7.3 million tons of capacity was offline globally, or 19 percent of 2008 production, Barclays Capital estimated last month. Reduced demand has added to inventories of the lightweight metal with London Metal Exchange monitored stockpiles almost doubling this year to a record of 4.6 million tons on Sept. 16.
Russian aluminum demand is rebounding and will rise 15 percent to 20 percent next year, said Deripaska, 41, who also controls Russian automaker GAZ Group.
"There is a new stimulus program more or less, cash for clunkers, which will create a lot of demand for our commercial vehicles," he said.
Globally, demand is expected to grow 8.2 percent next year after contracting 6.5 percent this year, according to Barclays Capital. The bank estimates supplies will exceed demand by 1.63 million tons in 2010, up 29 percent from this year.
Aluminum for delivery in three months dropped $9, or 0.4 percent, to $2,148 a ton by 4:28 p.m. in London. The metal has declined 36 percent from a record $3,380 a ton in July 2008.
Commodity investors have "realized that aluminum is the best hedge against the U.S. dollar and energy resources," Deripaska said. "People don't believe in the dollar and commodities benefit."
The U.S. Dollar Index, a gauge of the currency's strength against six counterparts, has dropped 8.3 percent this year. A weaker dollar tends to spur demand for commodities denominated in the U.S. currency from investors holding other monies.