ST PETERSBURG, June 21 -- The global market for aluminum may improve in the next 12 to 18 month, driven by demand in the car industry, construction and packaging, while demand for the metal remains stable in China and India, Oleg Deripaska, Chief Executive and largest shareholder in Russian aluminum giant UC Rusal PLC (0486.HK) told Dow Jones Newswires Saturday.
Speaking at the sidelines of the St Petersburg International Economic Forum, Deripaska said he expects aluminum prices to be above $2,200 per metric ton by the end of 2010. Demand for aluminum--which is used in cyclical industries like automotives and construction--slumped during the recent economic crisis, and the price of the metal hit a seven-year low of $1,300 a ton in February 2009. In response to falling prices Rusal cut its production by 11% in 2009 to reduce costs.
Deripaska said his company, the world's largest producer of aluminium, is operating currently at an earnings before interest, taxes, depreciation and amortization, or Ebitda, margin close to that of pre-crisis level and expects to maintain it.
He also said that while prices for aluminum stay at what he called "unfair" levels any talk of a possible merger of Russian metals and mining companies, the idea much discussed in 2008, is untimely.
Deripaska, said that currently his company, which owns 25% stake in giant mining company OAO Norilsk Nickel Mining & Metallurgical(GMKN.RS) and has representatives on the board and in the management there, is focusing on the miners' operational activity and dividend policy.
He said he is in talks with other Norilsk shareholders on paying an interim dividend for the first half of 2010. Norilsk Chief Executive Vladimir Strzhalkovsky said Thursday he doesn't exclude such a payment, but decline to provide any figures. Norilsk board decided end may to pay its shareholders $1.325 billion, or a half of the company's 2009 net profit, as a dividend, which was higher than that envisaged by the company's dividend policy, but below the level, proposed by Rusal.
Rusal expects to speed up the repayment of its debt to creditors and in the third quarter of the year to reach the level of debt envisaged for the end of 2011.