UPDATE 1-RUSAL May Cut Aluminum Output by 6 Pct in Next 18 Months

Industry News 10:26:49AM Feb 13, 2012 Source:SMM

HONG KONG Feb 13 (Reuters) - The world's top aluminum producer, Russia's United Company RUSAL Plc, said on Monday it may cut aluminum output by 6 percent in the next 18 months, joining similar moves by other producers of the metal, as it shifts some sales of aluminum produced at the end of 2011 to this year.

A supply glut amid a deepening European debt crisis and global economic slowdown has hurt demand and prices for the light weight metal, sending many aluminum producers into the red.

"The dynamic growth of the world economy in the first half of 2011 slowed down significantly by the end of the year, impacting the situation in the aluminum industry," RUSAL said in a filing to the Hong Kong stock exchange.

"The continued fears over the euro zone debt crisis and potential of a hard landing for the Chinese economy pushed aluminum prices lower despite the stable physical demand, bringing a large share of global production capacity below break-even point."

RUSAL's Hong Kong-listed shares lost more than half of their market value in 2011, underperforming the blue chip Hang Seng Index's 20 percent fall. They have rebounded about 35 percent so far this year to close at HK$6.63 last Friday against a 13 percent gain for the main index.

RUSAL forecasts global demand for aluminum will rise by 7 percent to 48.2 million tonnes in 2012.

It expects the aluminum market to become balanced in 2012 as more than 3-4 million tonnes of aluminum production will be left idle as prices for the metal are forecast to be below most producers' break-even point.

Global miner Rio Tinto has also acknowledged a gloomy outlook for the sector last week, when it slashed the book value of its Alcan unit by $9 billion.

Top U.S. aluminum producer Alcoa said in January it would slash output at two Spanish smelters and shut its Portovesme smelter in Italy, putting about 1,500 people out of work.

Some analysts expect excess capacity in aluminum smelting will drag on for years to come as political pressures in China and Russia to keep jobs and push self-sufficiency prevent or delay plant closures.

RUSAL said its aluminum output rose 1 percent to 4.12 million tonnes in 2011 and alumina production was up 4 percent at 8.15 million tonnes.

The company decided to partially shift sales of aluminum produced at the end of 2011 to 2012 and revenue from these sales will be reflected in the first quarter of 2012, it added.
 

Key Words:  RUSAL  aluminum output  aluminum Al 

UPDATE 1-RUSAL May Cut Aluminum Output by 6 Pct in Next 18 Months

Industry News 10:26:49AM Feb 13, 2012 Source:SMM

HONG KONG Feb 13 (Reuters) - The world's top aluminum producer, Russia's United Company RUSAL Plc, said on Monday it may cut aluminum output by 6 percent in the next 18 months, joining similar moves by other producers of the metal, as it shifts some sales of aluminum produced at the end of 2011 to this year.

A supply glut amid a deepening European debt crisis and global economic slowdown has hurt demand and prices for the light weight metal, sending many aluminum producers into the red.

"The dynamic growth of the world economy in the first half of 2011 slowed down significantly by the end of the year, impacting the situation in the aluminum industry," RUSAL said in a filing to the Hong Kong stock exchange.

"The continued fears over the euro zone debt crisis and potential of a hard landing for the Chinese economy pushed aluminum prices lower despite the stable physical demand, bringing a large share of global production capacity below break-even point."

RUSAL's Hong Kong-listed shares lost more than half of their market value in 2011, underperforming the blue chip Hang Seng Index's 20 percent fall. They have rebounded about 35 percent so far this year to close at HK$6.63 last Friday against a 13 percent gain for the main index.

RUSAL forecasts global demand for aluminum will rise by 7 percent to 48.2 million tonnes in 2012.

It expects the aluminum market to become balanced in 2012 as more than 3-4 million tonnes of aluminum production will be left idle as prices for the metal are forecast to be below most producers' break-even point.

Global miner Rio Tinto has also acknowledged a gloomy outlook for the sector last week, when it slashed the book value of its Alcan unit by $9 billion.

Top U.S. aluminum producer Alcoa said in January it would slash output at two Spanish smelters and shut its Portovesme smelter in Italy, putting about 1,500 people out of work.

Some analysts expect excess capacity in aluminum smelting will drag on for years to come as political pressures in China and Russia to keep jobs and push self-sufficiency prevent or delay plant closures.

RUSAL said its aluminum output rose 1 percent to 4.12 million tonnes in 2011 and alumina production was up 4 percent at 8.15 million tonnes.

The company decided to partially shift sales of aluminum produced at the end of 2011 to 2012 and revenue from these sales will be reflected in the first quarter of 2012, it added.
 

Key Words:  RUSAL  aluminum output  aluminum Al