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Rusal Sees Aluminum at $2,400 to $2,500 Next Year (Update1)
Sep 25,2010 11:53CST
industry news
Source:SMM

MANAMA, Sept. 25 -- United Co. Rusal, the world's biggest aluminum producer, expects prices for the metal to rise to $2,400 to $2,500 a metric ton next year as China scales back domestic production.

China may become a net importer of aluminum by late 2011 as the country's smelters cut output to curb costs and reduce power consumption, Rusal's First Deputy Chief Executive Officer Vladislav Soloviev said in Manama, Bahrain. Aluminum traded for about $2,178 on the London Metal Exchange today.

"Everybody thinks that China, sooner or later, will switch to a net importer because they can't produce the metal at this level of cost," Soloviev said today. "We will see a slight increase in the prices."

Rusal, saddled with debts of more than $13 billion, is banking on a continued recovery in aluminum prices following a slump caused by the global economic recession. Chief Executive Officer Oleg Deripaska has said he expects demand to grow fastest in China, where Rusal became the first Russian company to sell shares with a $2.24 billion offering on the Hong Kong exchange in January.

Rusal's sales to China, "small" this year, will rise once the company is qualified to sell on the Shanghai Metal Exchange, which is expected by the end of this year, Soloviev said. Asia may account for 30 percent of Rusal's sales, with China taking as much as half that amount, he said.

The Moscow-based company expects to produce 4.1 million tons of aluminum next year, little changed from 2010, Soloviev said. Production of alloys will rise to 1.5 million tons from 1.3 million tons.

The company's proposal to PT Aneka Tambang for a bauxite and alumina plant in Indonesia is on hold, Soloviev said. Rusal is currently focusing on reducing debt, he said.


 

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