MOSCOW Feb 1 (Reuters) - Aluminum prices are expected to rise up to 10 percent from current values by the end of the second quarter, as output cuts take effect, a senior executive at Rusal, the world's largest producer of the metal, said on Wednesday.
Prices could rise up to $2,400-$2,500 per tonne, Rusal executive Oleg Mukhamedshin forecast.
Aluminum prices ended last year near 18-month lows on concerns about economic weakness and oversupply, prompting Alcoa and Norsk Hydro to cut capacity. Rusal is also considering cutting capacity.
Still, Mukhamedshin forecast that demand from Asia and the U.S. will rise this year which, together with the reduced output, will support prices.
"We still see strong demand for aluminum. This year is going to be another record in consumption," Mukhamedshin told reporters in Moscow on Wednesday.
Prices for three-month aluminum on the London Metals Exchange traded at $2,266.50 per tonne at 1710 GMT against Tuesday's close of $2,239.
Mukhamedshin said he thought the aluminum market reached a bottom in the fourth quarter of 2011 when the price went below $2,000 per tonne.
"We estimate about 30 percent of all the producers around the world dropped below water," he said. "Currently the marginal producers' cash cost is above $2,400 per tonne. So this is why all major companies in the industry announced shut downs of production".
Top U.S. aluminum producer Alcoa said earlier this month it would slash output at two Spanish smelters and shut its Portovesme smelter in Italy, putting about 1,500 people out of work.
Norwegian producer Norsk Hydro has meanwhile said it plans to idle a third of its output at a plant in Australia.
Rusal is also considering shutting down of up to 6 percent of current production within the next 18 months and sees growing demand in China, the largest market for aluminum, Mukhamedshin added.
He expects demand in Japan to rise 6-8 percent and that in the U.S. to rise by 5 percent. Demand in Europe should be flat, he believes.
Mukhamedshin added that premiums for physical aluminum on the global market are slightly less than before but are above $100 per tonne.